Equity markets brace for earnings season and global indicators

Equity markets: Analysts predict that the ongoing fourth-quarter earnings season, coupled with global factors and macroeconomic data, will be instrumental in shaping the trajectory of equity markets in the coming week. Key determinants include the trading activity of foreign investors, the rupee-dollar exchange rate, and movements in the global oil benchmark, Brent crude.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, highlighted that the next batch of Q4 earnings reports, featuring industry giants like Hero MotoCorp, Larsen & Toubro, BPCL, and others, alongside the upcoming phase of voting, will drive stock-specific movements. Additionally, PMI data for the services sector is expected to impact trading sentiments.

Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd, emphasised the significance of US employment data and Q4 results from companies such as Dmart and Kotak Bank in setting the tone for Monday's market session.

Vinod Nair, Head of Research at Geojit Financial Services, foresees a period of consolidation due to pricey valuations and election-related uncertainties, while keeping a close watch on the Bank of England's policy decisions and euro zone GDP data.

Last week saw the BSE benchmark climbing modestly by 0.20 per cent, while the NSE Nifty advanced by 0.24 per cent. Ajit Mishra, SVP of Research at Religare Broking Ltd, stressed the importance of earnings reports and global market performance, particularly in the US.

However, the equity markets faced downward pressure at the end of the week, with the BSE Sensex dropping by 0.98 per cent and the NSE Nifty declining by 0.76 per cent. Prashanth Tapse, Senior VP of Research at Mehta Equities Ltd, noted investors' cautious stance amid rising valuation concerns, geopolitical tensions, and foreign institutional investor outflows, prompting profit booking activities.

(with PTI inputs)