Quarterly results from India Inc. will have a signficant say in the market's direction in the near term. Quarterly numbers and earnings guidance from Infosys, which will kickstart the reporting season on Friday next week will be eyed. HDFC Bank is also scheduled to announce its quarterly earnings on Friday.
A crucial economic report is also due for release next Friday. The government will release the industrial production data for August 2012 that day. A few days later, on 15 October, to be precise, the Central Satistics Office will release inflation data from September 2012. With an eye on these, investors are mostly likely to tread somewhat cautiously for a better part of the coming week.
The data on industrial production and inflation will provide a clue to what could be in store when the Reserve Bank of India meets to announce its monetary policy later this month.
If declining growth is any indication, then it is very likely that the apex bank may well resort to some monetary easing. Whether a rate cut happens or not, another redution in CRR looks somewhat imminent. The latest announcements from the government on the reforms front may prompt the central bank to resort to some liquidity easing measures. Keeping these in mind, investors may go in for some buying in rate sensitives.
Global crude oil prices and the rupee's movements against the U.S. dollar will also make a signfiicant impact on price movements. After a series of setbacks, the rupee strengthened against the greenback and triggered some selling in the IT space late last week.
On Wall Street, stocks ended modestly higher on Friday with traders reacting positively to monthly jobs report. With European markets too closing higher that day, Asian markets are likely to open on a firm note on Monday.
The Indian market may see some consolidation next week, but a few sharp rallies are not ruled out altogether. Besides rate sensitives, shares from information technology and metal sectors will be in focus.