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Q1 earnings, monsoon session may help Nifty touch 10,000

LiveMint logoLiveMint 17-07-2017 Nasrin Sultana

Mumbai: As the markets continue to rally, corporate earnings of June quarter will be crucial for the NSE Nifty index to touch the 10,000 mark this week. Focus will also be on Parliament’s Monsoon session that begins on Monday. India will also get a new President this week as election for the next head of the state will be held on Monday. Ram Nath Kovind is National Democratic Alliance’s (NDA) candidate, while Meira Kumar is the opposition’s nominee.

According to a PTI report, the monsoon session is likely to introduce 16 bills, while discussions are expected to centre around issues such as cow vigilantism, farmer protests, Kashmir unrest, action of law enforcement agencies against some opposition leaders over alleged corruption, and the China standoff in Sikkim.

Nagaraj Shetti, technical research analyst, HDFC Securities, said the overall chart pattern is hinting at the possibility of beginning of correction from the highs in the next one-two weeks.

“Hence, the maximum upside could be limited up to 10,000 mark and there is more possibility of resumption of profit booking in Nifty from the highs. Initially we expect near term reversal in the market in coming weeks,” he added.

Vijay Singhania, founder-director, Trade Smart Online, said, “In absence of any key economic data release, the focus will shift to upcoming monsoon session of Parliament and ongoing earning season. The cheering factor for the market is the progress of the monsoon across the country has been good.”

Heavyweights which are slated to announce first quarter earnings this week are Wipro, Hindustan Unilever, Reliance Industries, Bajaj Auto, ACC, Ultratech Cement and Kotak Mahindra Bank.

Motilal Oswal Securities Ltd expects Hindustan Unilever’s revenue to grow by 2%, with an underlying 1% volume decline, while operating margin is seen to remain flat at 20.1% in 1QFY18.

According to Prabhudas Lilladher Pvt. Ltd, overall net revenue for the Nifty companies is expected to increase 7.01% sequentially.

“The credit growth has been anaemic and was at 6% for the fortnight ended 23 June. With the capacity utilization of the Indian industry still hovering in the low seventies, we continue to believe that the capex cycle will take a while to recover leading to pressure on deposit rates and lending rates with net interest margins (NIMs) seeing a contraction,” it said in a 11 July report.

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