WPI data, Q4 earnings to drive stock markets this week
New Delhi: Corporate earnings from bluechips, including RIL and TCS, wholesale price index inflation data and foreign investor activity will set the tone for Indian markets this week, according to experts.
While domestic indices tomorrow may initially track the fall in US stocks last Friday on a set of weak macroeconomic indicators, analysts said there could be some pullback after the knee-jerk reaction due to Infosys results.
All eyes are now on the Wholesale Price index (WPI) for March 2013 that will come before mid-session on Monday. A positive surprise may cement hopes of a repo rate cut on RBI's May 3 meeting after retail inflation numbers showed a decline.
"Assuming slight moderation in food inflation and a continued correction in commodity prices, we expect March WPI inflation to be 6.16 percent YoY," said Deepali Bhargava, Chief India Economist, Espirito Santo Securities India.
Among the key corporate results this week, Reliance Industries (RIL) announces Q4 earnings on Tuesday, TCS (Wednesday), IndusInd Bank (Thursday) and Wipro (Friday).
"Once bitten, investors will be twice shy of Infosys. While the IT major will take time to come out of woods, Sensex now looks set to reverse the downfall with Q4 earnings season. IIP and CPI data, though shrugged off by investors, are indicators of economy bottoming out and inflation cooling off," said Aditya Trading Solutions Founder Vikas Jain.
Foreign fund flows would decide the mood on Dalal Street and a mid-week rally cannot be ruled out, he added.
The markets would be also closely watching the Foreign Trade Policy slated to be announced next week on April 18 to get sense of the government initiatives for boosting exports and alleviate the concerns pertaining to the widening current account deficit and growth, a fund manager said.
Stock markets will remain closed on Friday for Ram Navmi.
Last week, markets continued to fall for the second consecutive week shedding another 208 points due to a sharp fall in Sensex-major Infosys and sustained selling by foreign institutional investors.
Shares of Infosys had nosedived by 22 percent on Friday as the IT major reported disappointing fourth quarter numbers and lower-than-expected guidance for 2013-14 fiscal.