Comments
Indian markets are likely to open strong on Wednesday, thanks to firm Asian markets. According to analysts, domestic markets will remain in consolidation mode, as Q1 results from India Inc have not disappointed majorly.
In the short term, Indian markets will move along with global trends, they added. Besides, TINA factor (there is no alternative) will aid foreign flow in Indian markets, as risk-on approach will continue for some more time, they opined.
“Corporate earnings in the first quarter of FY22 have been in line with the elevated expectations, aided by the deflated base of Q1-FY21 and localised and less stringent lockdowns v/s Q1-FY21,” said Motilal Oswal. Sectoral earnings have diverged sharply on account of the impact of second Covid-19 wave and higher commodity prices impacting the margins of select sectors (auto, consumer staples, and durables), it said and added that on the flip side, cyclical sectors such as metals and oil and gas (O&G) have benefitted, driving in-line aggregate earnings.
Nifty futures on SGX at 16,650 (8 am IST) indicate a gap-up opening of at least 50 points for Nifty futures, on Tuesday closed at 16,595.85. The Nifty on Tuesday closed at 16,614.60. Asian markets, except Taiwan, were up between 0.4-0.7 per cent in early deal on Wednesday. However, the US stocks, closed in the red on Tuesday.
According to Binod Modi, Head Strategy at Reliance Securities, Benchmark Nifty and Sensex have been quite upbeat, while heavy selling pressure in mid-cap and small-cap stocks remained visible over last couple of days.
“However, considering improved visibility of sustained earnings growth in subsequent quarters, a meaningful correction in quality mid-cap names should be bought,” he said.
Sharp improvement in key economic indicators like GST collection, auto sales volume despite supply disruption, improvement in collection efficiencies of MFIs and other high frequency indicators like e-way bills, power consumption, strong import-export growth in July, etc. indicate sustainable rebound in corporate earnings in subsequent quarters. This should aid market to sustain premium valuations, he added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.