With several top notch companies slated to come out with their quarterly results, there will not be any lack of triggers for the market during next week, again a truncated one, due to a holiday on Wednesday (24 April) for Mahavir Jayanti.
Following a substantial decline in wholesale price inflation, investors built up positions in rate sensitive stocks last week, betting on hopes of a rate cut from the central bank. The central bank is scheduled to announce its Monetary Policy Statement 2013-14 on 3 May 2013.
Though more buying is not ruled out, some negative news on the earnings front and a slide in gold prices may well prompt a section of investors to stay away from the ring for a while.
With the focus clearly on earnings reports, movements are likely to be quite volatile for a better part of the week. And then, there is the expiry of April series derivatives contracts on Thursday.
The rupee's movements and the trend in the bullion market will also play a significant role in dictating the trend in the stock market. As gold prices plummeted, investors flocked to the equity markets last week. A significant rebound in gold prices in the coming week may well trigger some selling in stocks over the next few days.
Cairn India, Ultratech Cement, HDFC Bank, Axis Bank, Jindal Steel & Power, ICICI Bank, Hero Motocorp and Maruti Suzuki are among the companies that will announce their quarterly results during the week.
With three of the top four firms in the sector coming out with disappointing numbers, IT stocks may find the going a bit tough in the coming week. However, strong results from Microsoft and Google, which helped lift the Nasdaq on Friday, may trigger some buying in the Indian IT space as well.
Notwithstanding some upbeat reports here and there, global economic outlook remains quite uncertain, at least for the near term. Under the circumstances, investors are likely to tread cautiously and may well use rallies to trim down positions.