Earnings to decide moves

Mumbai: The market is likely to be in wait and watch mode this week ahead of the crucial US Federal Reserve meeting outcome on Wednes-day. US central bank is likely to cut lending rates by 25 basis points, first in 10 years with economy showing signs of weakness.

Heavy selling by foreign portfolio investors  is likely to keep market sentiment down, as Rs 1,503.26 crore worth of equities were sold on Friday. However, analyst said a bounce back is likely with technical indicators showing that the market is currently oversold.

It's a crowded earnings declaration week from Bharti Airtel, ITC, Bharat Electronics, DLF, Dr Reddy's Laboratories, Reliance Nippon Asset Management, Axis Bank, Hero MotoCorp, State Bank of India, Bank of India, United Bank, Allahabad Bank, VIP Industries, Ashok Ley-land, Eicher Motors, UPL, Tata Global Beverages, Trent, Marico, Godrej Consumer, Raymond, Bata, Tata Power, Power Grid and Union Bank declaring their results this week.

Dharmesh Shah, Head - Technical, ICICI Direct, said, "Equity benchmarks extended decline in expiry week as investors remained on the edge amid slowdown concerns. The broader market underperformed as the Nifty Mid-Cap and Small-Cap indices declined by nearly 2 per cent of each."

"With decline in the Nifty-50 by 7 per cent in past eight weeks, pessimism is getting discounted in the process and is likely to be followed by a meaningful technical bounce. So going ahead, we expect index to sustain key support zone of 10900-11000 and attempt a pull back from oversold trajectory," Shah said.

"The market will closely watch FOMC rate decision and trade war development in the coming week," Shah said.

Romesh Tiwari, Head of Research, CapitalAim said, "The benchmark Nifty 50 Index is still overall weak on charts and could find support around 11100-11150 levels. If the Index sustains below 11200 levels, then further downward movements will be triggered."

"Further, the rise in the geopolitical tension in the gulf region combined with weakness in Indian currency against the US dollar could keep the Indian market around the lower levels as we are the world's third-biggest oil importer and crude prices are edging higher on concerns about supply disruptions. Other than this, disappointing corporate earnings by large are also adding to the weakness," Tiwari said.

"For the next week, the stocks of the pharma sector could show positive moves while metal is expected to remain weak," Tiwari added.

Mustafa Nadeem, CEO, Epic Research said, "Fundamentals aren't supporting at this point in time. While earnings were in a much better shape in the previous quarter; this quarter has seen numbers much lower and with a recent dismal performance from Auto, FMCG we believe the sentiments may remain negative.”