India would be rather range-bound in the run up to election results and whatever be the global macros and the flows, the country will be charting its own trajectory of consolidation and sideways movement in the next 22 days, market experts say.
In an interview with CNBC-TV18, CIO Equity at Sundaram MF S Krishna Kumar and Director Equities at IIFL Private Wealth Management Anu Jain, shared their views on the fundamentals of the market and specific sectors.
“India will be charting its own trajectory of consolidation and sideways movement till we get clarity on the election verdict. We would get decisive move once the uncertainty is removed,” Kumar said.
“Expectations for earnings are mid-teens to high-teens for this quarter. In terms of the results which have come through in the month of April, broadly you have a 13 percent revenue growth, similar EBITDA improvement and profits, which are little lower than that number. We believe that the main earnings season would be more in the month of May and the bigger Nifty companies and the larger ones would be coming through in this month,” he observed.
“Consumer companies were expected to report a little weaker growth trajectory on the FMCG side which is basically coming through. The big delta in earnings for this quarter would come from a lot of the large corporate banks which will swing from very small profits or losses to a significantly better number in terms of earnings,” he added.
Speaking about trade for next week, Jain said: “We have entered the election zone and during these 25 days, we are expecting markets to be in a very tight zone. We have seen Nifty in the zone of about 11,550 to about 11,800 odd; it is not even 100 point volatility day-on-day but it is staying within that 250-300 point range. That is the same thing which is going with Bank Nifty despite some very stellar as well as some bad results. You have seen 29,500 on the lower side and 31,000 -32,000 as the top, so it is range-bound.
On the banking sector, Jain said, “On the long side we have seen the whole rally led by Bank Nifty. If you look at the banking index construct, it is basically HDFC Bank, State Bank of India (SBI), ICICI Bank and Kotak Mahindra Bank. We probably feel that the SBI may not be the big launcher out there, but HDFC, Kotak and probably some of the other banks may continue to perform like ICICI and Axis and that is the sector you would probably need to be positively biased if the market gives a breakout further. That is going to be the leading factor in the next round as well.”
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