NEW DELHI: India's response to the second wave of the COVID-19 pandemic and the release of Q4 company results, especially of India's IT behemoths, are likely to shape the trend of the country's equity market this week.
"On the domestic front, concerns over the spread of the coronavirus and the resulting restrictions around the country have put investors on alert," Gaurav Garg, Head of Research, CapitalVia Global Research told this publication.
On Sunday, India reported more than 1.50 lakh new COVID cases, sparking worldwide concern. To curtail this wave, states such as Maharashtra and Madhya Pradesh have implemented lockdown-like restrictions during weekends and many others are opting for night curfews.
"These challenges are likely to worsen if recent pandemic-containment controls are extended, causing further economic and operational disruption," added Garg.
Domestic equity benchmark Sensex slumped 1,449 points on the first day of last week but settled almost on a flat note. Nifty closed at 14,834.85, down by 0.2 per cent. Sensex lost 0.3 per cent during the week to close at 49,591.32.
On the impact of quarterly results (Q4FY21) that are to be announced this week, Vinod Nair, Head of Research at Geojit Financial Services, said, "IT and banking stocks will be in focus ahead of upcoming Q4 earnings. Banking stocks will remain on the radar as the market awaits the impact of Supreme Court judgement on banks asset quality and income recognition."
The upcoming results season will begin with TCS announcing its Q4 results on April 12, followed by Infosys on April 14, and Wipro and Mindtree on April 15. Analysts observe that these results are likely to beat market expectations.
On the technical side, Sameet Chavan Chief Analyst-Technical and Derivatives, Angel Broking, noted that since the last twelve trading sessions, the Nifty has been unable to go beyond the sturdy wall of 14900. "For the coming session, 14900- 15000 remains a key resistance zone and till the time we do not confirm a convincing close above it, we would avoid aggressive bets on the long side, especially in sensitive names. On the downside, 14800 followed by 14750 would be seen as immediate supports," Chavan pointed out.