Indian Markets Poised for Positive Momentum Amid Q4 Earnings Season

Indian markets maintain positive momentum amid Q4 earnings season, with sectors like Metals, Healthcare, and Realty seeing buying interest. Analysts expect mixed results from key companies, but the overall market outlook remains optimistic.

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Rafia Tasleem
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Indian Markets Poised for Positive Momentum Amid Q4 Earnings Season

Indian Markets Poised for Positive Momentum Amid Q4 Earnings Season

Siddhartha Khemka, Head of Retail Research at Motilal Oswal, expects Indian equity markets to maintain positive momentum and see stock-specific action amid the ongoing Q4 earnings season. Major companies like Hindustan Unilever (HUL), LTIMindtree, Indian Hotels, and Axis Bank are set to announce their quarterly results.

The Indian markets have been on a positive trend for the fourth consecutive day, with the Nifty closing with gains of 34 points at 22,402 levels. Sectors like Metals, Healthcare, and Realty have seen buying interest, while global markets have also turned positive as geopolitical tensions in the Middle East have eased. The decline in India's VIX, or volatility index, indicates lower market volatility in the near term, and niche sectors are expected to remain in momentum.

Why this matters: The ongoing Q4 earnings season and the performance of key companies will provide insights into the health of the Indian economy and shape investor sentiment in the near term. The positive momentum in the markets, driven by sector-specific buying and easing global tensions, could potentially attract more investment and boost overall market confidence.

Despite concerns over valuations, the Indian stock markets have exhibited positive momentum, with the broader market performing well. Nagaraj Shetti of HDFC Securities suggests that the near-term uptrend of Nifty remains intact, indicating potential buying opportunities during consolidation or minor dips. The US stocks and Asian shares also saw gains on Tuesday, with oil prices climbing in early trade on Wednesday.

Analysts expect mixed results from the companies announcing their earnings on Wednesday. HUL is projected to report a 2-5% decline in net profit for the March quarter, with flattish sales growth and a margin contraction due to factors like the termination of GSK-related commission income and an increase in royalty payments. LTIMindtree reported a 1.2% fall in net profit to Rs 1,100.7 crore in Q4, with revenue rising 2.3% to Rs 8,892.9 crore.

Khemka noted that metal stocks are witnessing fresh buying amid a rise in commodity prices, improving Chinese economy, and the expectation of healthy demand ahead. He also mentioned that the sharp decline in India's VIX amid the start of elections indicates lower market volatility in the near term, and niche sectors would continue to remain in momentum.

As investors await the Q4 results of key companies, the Indian equity markets are expected to maintain their positive trajectory, with a focus on stock-specific developments. "The majority of the sectors ended in the green, with buying seen in metals, healthcare, and realty stocks," Khemka stated, highlighting the sector-specific action in the markets.

Key Takeaways

  • Indian markets maintain positive momentum amid Q4 earnings season.
  • Sectors like Metals, Healthcare, and Realty see buying interest.
  • Nifty uptrend remains intact, indicating potential buying opportunities.
  • Mixed results expected from companies like HUL, LTIMindtree, Axis Bank.
  • Lower market volatility expected as India's VIX declines, niche sectors in focus.