NEW DELHI: Investors will closely scrutinise the economic data from the US, including the PMI and nonfarm payroll releases, to gain further insights into US economic performance, says Vinod Nair, Head of Research at Geojit Financial Services.
The corporate earnings outlook for H1 has been favourable, and expectations for a positive H2 earnings outlook are high. A positive performance in H2 could lead to potential earnings upgrades. Next week, market is anticipating results from major PSU banks, auto, and metal sectors with an optimistic outlook, he said.
The market exhibited a cautious tone at the outset, influenced by the uncertainty surrounding the US Fed's policy meeting. However, as the week progressed, the apprehension dissipated, and market sentiments rebounded. This turnaround was partly attributed to a modest decline in oil prices, which raised optimism about a potential pause in Fed actions, he said.
Furthermore, the market received a boost from stable domestic macroeconomic PMI and robust corporate earnings from domestic companies. These positive factors helped the market recover from its initial losses during the week, he said.
Notably, the auto sector faced challenges despite positive auto sales figures, while the mid and small-cap sectors demonstrated noteworthy performance, driven by strong demand and strong economic outlook, he added.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said next week investors will await US Fed Chair Powell speech for future guidance on interest policy. Next week markets are likely to consolidate with a positive bias.
The 2QFY24 corporate earnings have so far been in line, with BFSI and Automobiles driving the aggregate. The spread of earnings has been decent. However, the margin tailwinds are likely to moderate in 2HFY24 with base effect coming into play and pick-up in some commodity prices. Given the ongoing result season, sector and stock specific action will continue, he said.