Markets Next Week; Brace For Earnings Led Volatility

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Markets witnessed tremendous volatility this week, with heavy buying seeing on Monday and large scale selling pressure seen on Friday.

However, the indices still managed to end higher for the week with gains of nearly 1 per cent.

Markets Next Week; Brace For Earnings Led Volatility
On Monday, the week began with ferocious selling following worries over the Mauritius tax treaty. However, they quickly recouped losses and ended the day with marginal losses.

On Friday the sell-off was huge with the Sensex ending 300 points lower. The drop was largely on an increase in inflation data, which saw selling in banking stocks, on worries that the Reserve Bank of India would stay put in its Monetary policy meeting of June.

This week also saw the MSCI, the leading global player in capital market indexes, making changed to its India index. It has added four stocks and deleted as many as three stocks.

The additions are Bajaj Finance, Havells, Titan and Yes Bank while deletions are Reliance Communication, REC and United Breweries.

These stocks already reacted to the changes on Friday and hence are unlikely to move too much next week. Analysts see fresh inflows into stocks like Havells, Titan and Yes Bank.

Next week, much would depend on how the earnings season pans out. Bank of Baroda is expected to react to its results, which were a shocker. The bank reported a loss of Rs 3230 crores on the back of an increase in provisions for non performing assets.

A few more banking results would be unveiled next week including the likes of Karnataka Bank and Syndicate Bank. Individuals stocks would hence react to their results. Markets are largely expected to be directionless like the last few weeks. Benchmark indices have been in the 25,000 points range and are unlikely to move higher or sharply lower anytime soon.

However, much would also depend on global factors and how markets across the globe move. All in al, expect another week of steady movement, with volatility on account of quarterly results in individual stocks.

Read more about: markets
Story first published: Saturday, May 14, 2016, 9:40 [IST]
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