Markets To Extend Gains On Positive Quarterly Earnings, Say Analysts

While the markets witnessed selling this week, the focus for the upcoming session will be on quarterly results, which is expected to push the markets on the upper side, according to analysts.

The quarterly results seem to be good and profitability is one of the things markets care about, despite gyration on a daily basis, according to Deepak Shenoy, founder of Capital Mind.

"On a fundamental basis, I don't think that has changed and it's getting more reinforced... and markets are turning out not to be as expensive as people think they are," he said.

Markets will remain focused on earnings and selective stocks that give opportunity, said Mayuresh Joshi, head of equity research in India at William O'Neil India. High foreign institutional inflows are also expected to boost the market in the coming session, he said.

"We remain extremely selective and the kind of knee-jerk reaction that the market saw was global in nature," Joshi said. "With reports of 10-15% growth expected in capex outlay in the upcoming budget, we are not looking at any deep downside for the Indian market."

The market is managing to cling to the 21,400 support level and this may provide respite for the short term, according to Akshay P. Bhagwat, senior VP at JM Financial Services.

But, in a broader sense, 21,800 is an important resistance level and until this is successfully taken out, the market is still not out of the woods, he said. "There is a good chance that the markets may revisit the recent lows of 21,250 on the downside."

On Friday, India's benchmark indices snapped a three-day losing streak and ended higher as ICICI Bank Ltd. and Bharti Airtel Ltd. gained. However, the benchmark indices logged the biggest weekly losses in over two months.

The S&P BSE Sensex closed 496.37 points, or 0.70%, higher at 71,683.23, while the NSE Nifty 50 ended 160.15 points, or 0.75%, up at 21,622.40.

The banking sector is beginning to feel a bit of a pinch because of the recent regulations by the Reserve Bank of India, Shenoy said. "People are estimating this downfall is because of HDFC Bank, but I think it's going to happen across the board."

Tata Motors Ltd. has remained undisturbed by the market downfall, and the stock positioning is extremely positive, according to Bhagwat. He suggests a 'buy', with a target of Rs 862 and a stop loss of Rs 979 apiece.

In the pharma space, Cipla Ltd. is looking structurally positive, said Bhagwat. He gave a 'buy' call, with a target of Rs 1,362 and a stop loss of Rs 1,297 apiece.

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