Domestic markets are expected open on a weak note amid the indecisiveness of market participants. While global markets are mixed, SGX Nifty indicates a negative opening for Nifty. SGX Nifty is currently ruling at 17,700 as against Nifty April futures close of 17,712.

Amid weak Q4 results so far including from TCS and Infosys, and expected results from HDFC Bank, analysts say the index will move in a broader range while individual stocks will remain volatile based on their Q4 results and outlook guidance.

Mitul Shah, Head of Research at Reliance Securities, said the Q4 FY23 earnings season will pick up pace in the coming weeks. Meanwhile, mixed signals are emerging from the US, Europe, and Chinese economic data.

Inflation although declining, continues to run high in US and Europe, he said and added, “Initial signs of recession are emerging from the US jobs data and the TCS and Infosys management commentary. In India, meanwhile, inflation has eased while growth is steadily picking up pace led by accelerated government capex and PLI investments. Services exports are strong offsetting the slowdown in the merchandise exports and boosting India’s forex reserves.” 

In the coming weeks, investors will parse the earnings outcome of the March quarter and closely follow the management commentary for further cues.

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US stocks closed flat on Tuesday while most Asian stocks are down marginally in early deals on Wednesday.

Invesco Mutual’s outlook

According to Invesco Mutual Fund, with peak interest rates now looking at a distinct possibility globally and growth cooling off, the path to inflation normalisation may have finally opened up.

Besides, the recent underperformance of Indian markets in the past six months is also leading to a fast normalisation of India’s relative valuation, it said.

While the risk of earnings downgrades for FY24 remains as growth continues to moderate for a couple of quarters, entry opportunities for investors will likely surface during the rest of this year, it further said.

“On current reckoning, we expect the next earnings upgrade cycle in India to commence from mid-2024,” said Invesco Mutual Fund.

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