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A handful of economic readings and third quarter earnings of domestic companies Infosys Technologies and HDFC will determine the direction of stock markets in the week ahead.
Investors will also closely watch the escalating political tensions between the US and Iran that drove up crude oil prices by almost 3% last week. As India imports over 75% of its crude requirements, investors worry a further spike in prices could scuttle the country's attempts to mellow inflation.
Brokers said traders may rely on overseas market trends for cues earlier in the week, but the focus will shift to domestic events in the later part of the week. Infosys Technologies will kick off the earnings season for the December quarter on Thursday.
The IT major is expected to post stronger earnings growth than its peers in a seasonally weak quarter, thanks to the weaker rupee to the dollar, but its share price has already factored in this prospect, said analysts. Investors will focus more on the extent to which the company raises its revenue guidance for the year.
"The broad expectations are that Infosys will upgrade earnings guidance. The question is how much? The stock is fairly priced and the management commentary is awaited now," said Sandip Sabharwal, CEO-portfolio management services of brokerage Prabhudas Lilladher.
William Blair & Company, a Chicago-based investment firm, said, "We estimate fourth quarter revenue of $1.87 billion, representing 17% growth yearover-year or 3% sequentially, but believe the company (Infosys) will guide to 3-4% sequential growth off a modest December quarter."
Sabharwal said expectations of a surge or drop in earnings during October-December have already been baked into stock prices of most companies. On Thursday, when Infosys announces results, the government will release the November industrial production numbers that could show an improvement over the previous month.
Industrial output is expected to grow 2.7% in November compared to the contraction of 5.1% in October, according to Barclays Capital. "Industrial production is expected to stay weak amid domestic macro headwinds and slowing exports.
However, growth will likely be better than October, reflecting a stronger core sector and fewer holidays," the investment bank said. The government will release the December inflation data on Friday.
Analysts said a drop in inflation could improve sentiment as the RBI may cut rates if data shows prices in December have dropped.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
A handful of economic readings and third quarter earnings of domestic companies Infosys Technologies and HDFC will determine the direction of stock markets in the week ahead.
Investors will also closely watch the escalating political tensions between the US and Iran that drove up crude oil prices by almost 3% last week. As India imports over 75% of its crude requirements, investors worry a further spike in prices could scuttle the country's attempts to mellow inflation.
Brokers said traders may rely on overseas market trends for cues earlier in the week, but the focus will shift to domestic events in the later part of the week. Infosys Technologies will kick off the earnings season for the December quarter on Thursday.
The IT major is expected to post stronger earnings growth than its peers in a seasonally weak quarter, thanks to the weaker rupee to the dollar, but its share price has already factored in this prospect, said analysts. Investors will focus more on the extent to which the company raises its revenue guidance for the year.
"The broad expectations are that Infosys will upgrade earnings guidance. The question is how much? The stock is fairly priced and the management commentary is awaited now," said Sandip Sabharwal, CEO-portfolio management services of brokerage Prabhudas Lilladher.
William Blair & Company, a Chicago-based investment firm, said, "We estimate fourth quarter revenue of $1.87 billion, representing 17% growth yearover-year or 3% sequentially, but believe the company (Infosys) will guide to 3-4% sequential growth off a modest December quarter."
Sabharwal said expectations of a surge or drop in earnings during October-December have already been baked into stock prices of most companies. On Thursday, when Infosys announces results, the government will release the November industrial production numbers that could show an improvement over the previous month.
Industrial output is expected to grow 2.7% in November compared to the contraction of 5.1% in October, according to Barclays Capital. "Industrial production is expected to stay weak amid domestic macro headwinds and slowing exports.
However, growth will likely be better than October, reflecting a stronger core sector and fewer holidays," the investment bank said. The government will release the December inflation data on Friday.
Analysts said a drop in inflation could improve sentiment as the RBI may cut rates if data shows prices in December have dropped.
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