Stock Market: Earning season kicks in; inflation projections guide bourses
Photo credit Twitter Data Patterns (Defence Minister Rajnath Singh Awards Raksha Mantri Award to Data Patterns for our best innovation in the category of Medium scale industry.) Data Patterns put forward its development of the Precision Approach Radar.
By S Jha
New Delhi, April 13: Dow Jones snapped a four day rally to end the day marginally lower tracking the minutes of the Fed meeting. Amid certain indications of the US heading into recession, the American bourses switched on the caution button. This was despite the fact that the inflation in the US grew slower than expected consensus view of the market.
But the Indian bourses remained firm in the Wednesday session, with Nifty scaling 17800 level, and the index is slowly inching upwards amid lack of negative surprises. On the positive side, the bourses are counting on the likelihood of the Reserve Bank of India staying on the pause mode on the headline rates, as inflation further came down to 5.66. The RBI sticking to moderation of its hawkish stand after stepping up the Repo rate by 250 basis points in a short span of time is more likely given that food inflation has sharply come down, as stated by The Raisina Hills previously.
With the Monsoon likely to be normal despite the El Nino effect and bumper crops anticipated, the inflation may head lower in the next few weeks, which could provide the much needed cushion to the RBI to cool down on heated interest rates. Even a rate pause may remain a good news for the stock market.
TCS began the earning season for the market. Now, the bourses may for the next few weeks trend on cues from the industry leaders and a lot of action is likely to be seen in the individual stocks.
Evidences are there aplenty that the retail investors are lapping the stocks which have been badly beaten in the last 18 months, with realty and pharmaceutical clearly emerging as favourites. Laurus Lab, severely punished in the last 18 months, is now being seen as a value investing bet. IEX is another such stock. IG petrochemical is also reacting to value buying. Data Patterns, the private defence player, has broken out of the all time high to now trade above Rs 1600. This Chennai-based company, which came with an IPO not long ago, has so far given handsome returns to the investors, with the stock price more than doubling, while the company record book keeps swelling.
With the global shocks subsiding, the retail investors are clearly coming back to the market, which may steady the bourses in the near future. It must be recalled that the depth of the retail investors had ensured that Indian equity market fell the least amid the global rout.
About The Author
