Earnings, virus trend to set market tone: Analysts

The trend in Covid-19 cases as well as corporate earnings will set the tone for equity markets this week, analysts said.

New Delhi: The trend in Covid-19 cases as well as corporate earnings will set the tone for equity markets this week, analysts said.

Participants are also hopeful of more stimulus measures from the government to prop up growth amid the coronavirus crisis, they added.

Economic activities are set to resume in a graded manner from April 20, which could also lift market sentiment.

"Currently, a major part of the world population is under lockdown and it is expected that markets may not take any material direction till the lockdown ends.

"The moment lockdown ends, market would start reacting to the ground reality. In the coming weeks, corporates are expected to announce their quarterly earnings performance," said Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote.

Infosys and ACC are the two major companies scheduled to announce their earnings this week.

"Going ahead, we believe, the markets would react to the corporate earnings, trend in coronavirus cases and any economic stimulus package announcement from the government.

"The earnings season has already started and the investors would be focusing on the management commentary with regards to the impact of Covid-19 on their respective businesses," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

On Monday, HDFC Bank would remain in focus after it announced its earnings over the weekend.

HDFC Bank on Saturday posted a 15.4 per cent rise in consolidated net profit at Rs 7,280.22 crore for the March quarter on healthy interest income, even as it faced a hit towards the end of the fiscal due to the Covid-19 pandemic.

"There is not much expectation about the current quarterly earnings season and the disappointment seems to be already factored into the stock prices. Markets will watch out for management commentary regarding the business outlook and earnings guidance.

"We have market heavyweights like Infosys, ACC etc declaring their results, which will guide sector specific moves this week," Vinod Nair, Head of Research Geojit Financial Services said.

According to Religare Broking, VP - Research, Ajit Mishra, "Announcements from the earnings front will continue to trigger volatile swings on the stock-specific front."

Other key factors like Brent crude trend, investment pattern by overseas investors and rupee-dollar movement would also influence trading, they added.

The death toll due to COVID-19 rose to 507 and the number of cases to 15,712 in the country on Sunday, according to the Union Health Ministry.

In the last week, the the 30-share BSE Sensex rose 429.10 points or 1.37 per cent.

(PTI Report)