Markets May Again Fall Next Week

The benchmark indices staged a sharp rebound of nearly 13 per cent this week, led by some solid buying by Foreign Portfolio Investors. Domestic institutions too continued to be buyers this week, which pushed indices higher.

The indices, which had fallen for seven straight weeks, finally had a good week, which was also truncated. The markets were closed on Monday and Friday, the latter for Good Friday. In fact, most of the global markets including the European markets too were shut for Good Friday, a day market to coincide with the death of the Lord Jesus Christ.

Covid-19 infections continue to surge

Rising infections and deaths in the last few days, may once again play on the mind of investors. India saw the largest ever spike of more than 1,000 covid-19 infections in the day on Friday. Confirmed coronavirus led infections in the US crossed 500,000, which continues to remain very worrying. The situation continues to remain grim in the other parts of the world, including Europe.

Germany has experienced a total of 117,658 coronavirus cases including 2,544 deaths.

As we write, India is most likely to extend the lockdown, which means the economy is likely to come to a standstill once again. Select sectors like the farm sector may of course need an exemption. As things stand, the next week may look a little more grim for the stock market. The much awaited package for industry has also not come through this week. There were reports that there could be some benefits for battered sectors like aviation and tourism. One would need to wait and watch to see if any of this comes through.

Corporate results will begin to trickle in

TCS will kick-start the earnings season, with the company to declare its quarterly results on April 16. It's important to remember that the numbers may not be very bad, as the real impact for most corporates is likely to be felt in the first quarter of FY 2020-21.

It will also be important to read into the commentary of TCS and what the management says on the future pipeline of orders.

The banking sector is unlikely to be impacted too much for the quarter ending March 31, 2020. The real impact would be felt in the April to June quarter.

Overall, markets are expected to be very volatile in the next week as well. It looks like it could be a further downside for the markets, if a lockdown is announced. Investors are advised to exercise caution before investing.