Global sentiment will influence the market direction in the early part of the week. Corporate results, particularly from Infosys on April 12, will set the trend for the later part of the week.

Another important development is the introduction of call auction as bourses extend the pre-open call auction facility to all shares and introduce a periodic call auction for illiquid scrips from Monday following SEBI’s directive.

Stock exchanges have announced the list of illiquid stocks that will be traded in hourly call auction window from Monday. In all, 2,070 stocks will come under illiquid scrip trading window. However, none of the BSE-500 or CNX-500 (except Bannari Sugars) scrips is in the list. Among the identified stocks, BSE-listed stocks account for 1,807, 20 stocks are listed on NSE and stocks listed on both the exchanges account for 243.

Brokers fear the new move will dry up volume further.

No optimism

Analysts are not betting big on earnings. Most brokerages expect the quarterly numbers fromto be lacklustre, especially auto makers.

According to Bank of America-Merrill Lynch, “Over the past two years, we have sounded like a broken record with our theme that earnings are likely to be downgraded. Unfortunately, we were right, with FY-13 Sensex EPS likely to come in below Rs 1,200, nearly 10 per cent lower than the bottom-up number a year ago. Sadly, we continue with the same theme – we expect FY-14 Sensex EPS to be downgraded below Rs 1,300, for growth of under 10 per cent, versus current bottom-up growth of 17 per cent.”

The only good news, according to BofA-ML, is that EPS growth, which it expects at 8-9 per cent, is much higher than the 5-per cent expected for FY-13. “For long-term investors, we are probably close to the bottom of the earnings cycle, though FY-14 is unlikely to be the year of recovery,” it added.

Infosys results will be in focus, as the company’s performance is likely to set the trend for the IT sector. More than the results, outlook and guidance from the company for the next year will be keenly watched. Investors are hoping for a repetition of the previous quarter performance when Infosys surprised the market with strong results.

Other companies that would be declaring their earnings include Reliance Industrial Infrastructure Ltd, Alkali Metals Ltd, Goa Carbon, Development Credit Bank, Chemfab Alkalis and Gruh Finance.

FIIs selling

It appears that the confidence of foreign institutional investors – the only silver lining so far – also seems to be fading. These funds, which were buyers for most of this year, have now become net sellers. In the last four trading sessions, FIIs remained net sellers, albeit the outflow was marginal. Till March, FIIs purchased equities worth of Rs 55,622.40 crore.