Benchmark indices are expected to trend higher in the coming week, as the Union Budget 2020 draws near.
There are hopes that the Union Budget would do away with the Long Term Capital Gains on equity shares and equity mutual funds. However, given the precarious nature of government finances, expecting too many goodies to be rolled out would be a little far-fetched now.
In any case negative news is being digested by the market rather easily and it is unlikely to disturb the market trend, given the solid flow of liquidity into the Indian markets.
Markets may move higher
The two major numbers that came out this week were rather mixed. Reliance Industries quarterly numbers were slightly below expectations, as refinery and petchem business disappointed, while retail and digital business did well. Reliance Industries shares might see a dip in the coming days, given that the shares have rallied significantly. In any case the stock is now trading at more than 20 times one year forward p/e.
TCS too marginally disappointed and compared to Infosys the results were lacklustre. Net profits for TCS came in at Rs 8042 crores, as against analysts expectations of close to Rs 8,200 crores. It will not be a surprise to see the stock decline marginally when trading resumes on Monday.
Banking stocks came in for some pressure on Friday, given the huge exposure to telecom companies. The trend is unlikely to change too much.
The one stock that has been constantly hit through the week is the stock of IndusInd Bank. It is unlikely that there would be a quick recovery in the stock, as the quarterly numbers for the period ending Dec 31, 2019, disappointed the street.
Markets are going to edge higher, there is little doubt on that. Individual stocks are likely to react to their numbers and Monday could see Reliance Industries and TCS reacting to the same.
Investors would do well to limit their exposure and hold stocks, rather than taking more position.