- Earnings from Reliance, HDFC Bank, and ICICI Bank will guide market trends this week
- US economic data and global geopolitical developments will influence investor sentiment
- RIL posted a nearly flat Q3 profit of Rs 18,645 crore amid mixed business performance
Trading patterns in the stock market this week will largely depend on the earnings announcement from corporates for the third quarter of the current financial year, global trends and foreign fund movement, according to analysts.
Geopolitical developments and any update on trade negotiations would also be keenly tracked by investors, according to the experts. Participants will initially react to the earnings of key heavyweights, such as Reliance Industries Ltd, HDFC Bank Ltd and ICICI Bank Ltd. The focus will then shift to the broader set of third-quarter earnings from several large and mid-cap companies across sectors.
"On the global front, US macroeconomic data, including GDP growth, jobless claims and PMI readings, will influence risk sentiment and currency movement," Ajit Mishra, senior vice president of research at Religare Broking, said. "Geopolitical developments and updates on trade negotiations will also remain on investors' radar."
RIL reported on Friday almost a flat net profit of Rs 18,645 crore for the third quarter, as a decline in gas production and weakness in its retail business offset gains in other segments. The country's largest conglomerate saw muted earnings growth in the retail business on GST rate rationalisation, demerger of consumer product business and distribution of festive buying split between two quarters.
It posted a consolidated net profit of Rs 18,645 crore, or Rs 13.78 per share, in the October-December period, compared to Rs 18,540 crore, or Rs 13.70 per share, a year back, according to a company statement.
"Beyond earnings, market participants will keep a close watch on the geopolitical situation and any crucial updates regarding the US-India trade deal. With the Union Budget approaching, sector-specific movements based on pre-budget expectations are also likely to gain traction," Santosh Meena, head of research at Swastika Investmart Ltd, said.
HDFC Bank's consolidated profit jumped 12.17% to Rs 19,807 crore in the December quarter. ICICI Bank's consolidated net profit in the quarter declined 2.68% to Rs 12,537.98 crore.
"Indian markets head into the new week with a cautious but stock-specific tone, as investors balance domestic earnings cues against global macro and geopolitical developments," Ponmudi R, chief executive officer of Enrich Money, an online trading and wealth tech firm, said. "Banking stocks are likely to remain in the spotlight as markets digest quarterly results from heavyweights, such as ICICI Bank and HDFC Bank, along with a host of private and public sector lenders."
On the global front, uncertainty around US trade negotiations and the continued 50% tariff on Indian imports remain a headwind for sentiment. However, attention is shifting to the India–EU trade agreement, which is expected to be concluded later this month and can act as a meaningful catalyst for improved investor confidence, he said.
Commerce and Industry Minister Piyush Goyal had said on Friday the free trade agreement between India and the 27-nation bloc EU, the negotiations for which are at the last leg, will be the "mother of all deals" the country has signed so far. The conclusion of talks for the agreement is likely to be announced on January 27.
The forthcoming results this week are from Bharat Heavy Electricals Ltd, LTIMindtree Ltd, Punjab National Bank, AU Small Finance Bank Ltd, Adani Energy Solutions Ltd, Bank of India, InterGlobe Aviation Ltd, DLF Ltd, Bharat Petroleum Corp. and Adani Green Energy Ltd.
Markets largely consolidated during the last week amid mixed cues and ended almost unchanged. In a holiday-shortened last week, the BSE benchmark dipped 5.89 points, and the NSE Nifty went up by 11.05 points.
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