Markets in Motion: Q2 Earnings, Global Shifts and Foreign Investment Lead the Charge

Quarterly earnings from corporates, global trends, and trading activity of foreign investors will guide market sentiment this week, analysts said, adding that benchmark indices may face volatile trends.

“The upcoming release of Q2 results will be closely watched, providing insights into corporate performance. Meanwhile, the escalating tensions between Israel and Iran introduce a significant geopolitical risk, potentially leading to increased oil prices and market volatility. Foreign Institutional Investors (FIIs) have been a key driver of the Indian market’s performance, and their stance will depend on factors such as global economic conditions, and domestic political developments,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

HDFC Bank on Saturday reported a 6 per cent increase in September quarter net profit to Rs 17,825.91 crore on a consolidated basis.

On a standalone basis, the largest private sector lender’s post-tax net grew to Rs 16,820.97 crore during the reporting period, as against Rs 15,976.11 crore in the year-ago period.

“In the absence of any major triggers, market participants will focus on upcoming earnings for direction. First, they will react to the results of banking heavyweights such as HDFC Bank and Kotak Bank. Later, companies like ITC, Hindustan Unilever, BPCL, HPCL, and Ultratech Cement will also announce their earnings,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

Bajaj Housing Finance, Adani Green Energy, Bajaj Finance, One97 Communications, Zomato, Bajaj Finserv and Bank of Baroda would also announce their earnings this week.

Kotak Mahindra Bank on Saturday posted a 13 per cent growth in September quarter profit to Rs 5,044 crore, helped by performance of its subsidiaries.

On a standalone basis, the private sector lender’s net profit for the quarter grew 5 per cent to Rs 3,344 crore, limited by a jump in provisions.

“Geopolitical uncertainty, coupled with sluggishness in the Chinese economy and persistent FII outflows from the domestic markets, have led to caution,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Massive foreign fund exodus from the domestic markets dragged the benchmark indices lower last week.

Last week, the BSE benchmark declined 156.61 points or 0.19 per cent, and the Nifty went lower by 110.2 points or 0.44 per cent.

“The trend of FII selling and DII (Domestic Institutional Investors) buying is likely to sustain in the near-term. The rationale behind FPIs (Foreign Portfolio Investors) selling is the elevated valuations in India and the cheap valuations of Chinese stocks, which the FPIs have been buying aggressively since mid-September,” V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

Mcap of 4 of Top-10 Most Valued Firms Jumps Rs 81,151 Cr Last Week

Four of the top-10 most-valued firms together added Rs 81,151.31 crore in market valuation last week, with ICICI Bank and HDFC Bank emerging as the biggest gainers.

While HDFC Bank, Bharti Airtel, ICICI Bank, and the State Bank of India were the gainers, Reliance Industries, Tata Consultancy Services (TCS), Infosys, Hindustan Unilever, ITC, and Life Insurance Corporation of India (LIC) suffered a combined erosion of Rs 76,622.05 crore from their market valuation.

ICICI Bank added Rs 28,495.14 crore, taking its market valuation to Rs 8,90,191.38 crore.

The valuation of HDFC Bank jumped Rs 23,579.11 crore to Rs 12,82,848.30 crore.

State Bank of India’s market valuation climbed Rs 17,804.61 crore to Rs 7,31,773.56 crore and that of Bharti Airtel went up Rs 11,272.45 crore to Rs 9,71,707.61 crore.

On the other hand, the market capitalisation (mcap) of Infosys slumped Rs 23,314.31 crore to Rs 7,80,126.10 crore.

The valuation of Reliance Industries declined Rs 16,645.39 crore to Rs 18,38,721.14 crore.

The mcap of Hindustan Unilever tumbled Rs 15,248.85 crore to Rs 6,38,066.75 crore and that of TCS diminished by Rs 10,402.01 crore to Rs 14,91,321.40 crore.

LIC’s valuation went lower by Rs 8,760.12 crore to Rs 5,91,418.91 crore.

The mcap of ITC dipped Rs 2,251.37 crore to Rs 6,08,682.29 crore.

Reliance Industries continued to remain the most-valued domestic firm, followed by TCS, HDFC Bank, Bharti Airtel, ICICI Bank, Infosys, State Bank of India, Hindustan Unilever, ITC, and LIC.

(With PTI inputs)