Markets will react to Infosys, HDFC Bank Q4 on Mon. What to expect in the week?

In the last trading session (April 13), Sensex ended at 60,431 up by 38.23 points or 0.06%. Nifty 50 closed at 17,828 up by 15.60 points or 0.09%. IT stocks nosedived sharply after TCS was disappointed in the fourth quarter of FY23.

Ahead, markets will react to major earnings of IT, banking, and financials including that of Infosys and HDFC Bank’s performance.

Just like its peer TCS, Infosys missed the street’s expectations and posted a PAT of ₹6,128 crore down by nearly 16% QoQ but up by nearly 6% YoY. Similarly, revenue from operations of the second largest IT firm, dipped by 2.2% QoQ but was higher by 16% YoY to ₹37,441 crore in the quarter.

Meanwhile, HDFC Bank posted 19.8% growth year-on-year in net profit to ₹12,047.5 crore in Q4. Net interest income (NII) jumped by 23.7% YoY to f 23,351.8 crore in the quarter. The bank showed healthy growth in deposits and credit, while provisions dropped steeply in Q4. Also, the bank’s asset quality continued to be stable.

Vinod Nair, Head of Research at Geojit Financial Services said, “The Indian market displayed resilience in the early half of the week, aided by positive quarterly business updates from leading sectors and continued FII buying. The RBI’s decision to keep the policy rates unchanged, along with positive revisions to GDP and inflation forecasts, also bolstered market sentiment. Although the downward revision of FY24 inflation to 5.2% was earlier seen as slightly ambitious, the March CPI inflation rate of 5.66% lent support to the RBI’s stance. However, solid US job data raised concerns over further rate hikes by the Fed. Global markets were also perturbed after the FOMC minutes hinted at a possible mild recession due to banking turmoil despite US inflation cooling to 5.0%.”

Nair added, “The top IT firm’s weak quarterly earnings and cautious outlook, which highlighted deferred spending and uncertainty in the BFSI segment, dampened the domestic market mood in the latter part of the week. The earnings reports, primarily from the IT and banking sectors, will influence market trends in the upcoming week.”

Similarly, Ajit Mishra, VP – of Technical Research, at Religare Broking said, in absence of any major event, the focus will be on earnings and global markets for cues. On the earnings front, participants will first react to Infosys and HDFC Bank’s numbers in early trade on Monday. Among the other prominent names, Tatacomm, HCL Tech, and ICICI Bank will announce their results during the week.

According to Mishra, markets have finally witnessed a reversal, after spending nearly four months in a corrective phase and now we’re eyeing the 18,100+ in Nifty. He believes there could be some intermediate consolidation first however the tone is likely to remain positive.

In case of any dip, Mishra said, “The 17,400-17,600 zone would act as strong support. Though most sectors are contributing to the move on a rotational basis, we reiterate our preference for banking, financials, FMCG, and auto and suggest picking selectively from others.”

Furthermore, Rohan Patil, Technical Analyst, SAMCO Securities pointed out prices have shown a strong reversal from the lower levels and gained more than 5% in just three weeks. The cheerful mood at the stock market continued. On the weekly expiry day too as Nifty recovered sharply by almost 100 points from the lower levels and ended the day in green and the positive takeaway was that the optimistic baton continued for the 9th straight day.

He also said, “The frontline index has given a bullish confirmation by giving a break above the previous intermediate high and neglecting the lower top lower bottom move. The momentum oscillator RSI (14) has witnessed a breakout of a three-month-long consolidation band and the oscillator has closed above its horizontal trend line with a bullish crossover.”

Technically, Patil added, “the view remains with a bullish bias with buy-on dips to be used as a strategy, with support to be seen near 17,550 levels while resistance is now at 18,000 levels.”

Markets have been in a 9-days rally in a row! They have been in green on all days of April hence. From March 29 to April 13th, Sensex skyrocketed by over 2,817 points or 4.9%. While Nifty 50 jumped by over 876 points or 5.2%.

FPIs have also been net buyers throughout the current month as of now. As per NSDL data, FPIs invested ₹8,767 crore in Indian equities so far in April month. On the other hand, they are net sellers in the debt market with an outflow of ₹1,025 crore, while removing ₹200 crore and ₹193 crore from debt-VRR and hybrid instruments.