Quarterly results, inflation data hold key to markets

 The two triggers for stock markets this week starting from Monday will be corporate results and economic data, with a slew of banks, FMCG, IT, energy, and auto companies set to declare their third quarter results, apart from inflation data to be released by the Central Statistics Office (CSO).

HDFC Bank, Axis Bank, South Indian Bank, IDBI Bank, ITC, TCS, Wipro, Reliance Industries, NIIT, HCL Technologies, Mindtree, Bajaj Auto and Hero MotoCorp will be coming out with their quarterly results that will determine the course of the stock markets.

A preview by HDFC Securities said: “Investors and analysts will closely watch the management commentary that would accompany the results, which could cause revision in their future earnings’ forecast for the current (fiscal) year and or next year.”

On Monday, the CSO will be releasing inflation data based on the combined consumer price index for urban and rural India, apart from wholesale price index (WPI)-based inflation, for December 2012. Citing a poll conducted among economists, HDFC Securities said that WPI inflation is likely to go up marginally to 7.3 per cent in December 2012 from 7.24 per cent in November 2012. 

According to a Kotak Securities preview note, the expectation is that private banks would fare better than public sector banks (PSBs).  The note said that private banks are likely to post 22.8 per cent growth in net income on a year-on-year (y-o-y) basis, compared to 8.2 per cent for PSBs. HDFC Securities has also said that legacy of stressed assets and incremental loan restructuring will be in focus in the third quarter also.

There is a silver lining to the banking story, it added. “On a quarter-on-quarter basis, the growth in slippages and provisions could be lower. This in turn will drive earnings growth, especially for PSBs.

For IT companies, Kotak Research has estimated a revenue growth of about 2.9 per cent on a sequential basis.