Earnings, Coronavirus trend, US Fed’s interest rate decision to drive equities in coming week

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April 26, 2020 10:31 AM

On Friday,the BSE benchmark index tumbled 536 points as finance and bank stocks skidded following the announcement. 

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Quarterly earnings, trend in coronavirus cases, and the US Fed’s interest rate decision will be the major drivers for markets in the holiday-shortened week ahead, analysts said.  Participants would also keep an eye on retail investor sentiment in the aftermath of Franklin Templeton Mutual Fund shutting six debt schemes, they added.  Bourses will remain closed on Friday for ‘Maharashtra Day’.

“Investors are still struggling in evaluating the impact of coronavirus pandemic on business as companies refrain from giving guidance. Going ahead, markets are likely to react to earnings, trend in coronavirus cases, oil price and currency movement along with global events.  “Any announcement from the government on economic stimulus package could provide some interim relief,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

Deepak Jasani, Head of Research, HDFC Securities, said: “The US Federal Reserve’s two-day meeting begins on 28 April and interest rate decision will be announced on 29 April 2020. Indian markets failed to score a third back to back weekly gain on worries about economic growth in the background of Covid-19 lockdown. The latest Franklin Templeton Mutual Fund issue has created fresh worries on stress in the economy – especially in the financial sector.”
Franklin Templeton Mutual Fund late on Thursday announced winding up of six debt schemes, with assets under management of over Rs 25,000 crore, due to redemption pressures and lack of liquidity in bond markets amid the COVID-19 crisis.

On Friday,the BSE benchmark index tumbled 536 points as finance and bank stocks skidded following the announcement.  “Markets are trading uncertain with the virus updates not giving any solace. Investors are looking forward to stimulus measures from the government to keep supporting the affected industries.

“Additionally, the week ahead will also be driven by stock-specific news regarding the business outlook of individual companies. Any easing of lockdown restrictions will be taken as a positive for the market as a whole,” said Vinod Nair, Head of Research, Geojit Financial Services.

IndusInd Bank and Axis Bank are scheduled to report their results this week, along with FMCG giant HUL.
During the last week, the BSE 30-share benchmark Sensex declined 261.50 points or 0.82 per cent.  The death toll due to COVID-19 rose to 775 in India, with the number of cases inching close to the 25,000-mark. The coronavirus has infected 2.8 million people globally and killed over 190,000.

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