Results, markets to dictate trend

Indian markets will be entering a new phase this week. Second quarter (Q2) financial results and foreign markets — especially the Wall Street — will dictate the Sensex movement in the coming days. Also expect the volatility to continue.

Infosys will kickstart the reporting season on October 11. TCS is also slated to unveil Q2 results on the same day. Marketmen expect encouraging Q2 results from IT companies on the back of strong volume growth, stable billing rates and steady rupee value during the quarter. “What matters is the Q2 results from manufacturing companies across various segments. Q2 profits will be a crucial factor in deciding whether the current valuations are proper,” said an analyst. Any fall in Q2 profits will bring down the P-E ratio and pull down their prices. But market expectations are running high.

Marketmen are also getting worried about the fall in global markets. Wall Street was going downhill in the last few days amidst worries over a slowdown in the US economy. Other Asian markets also followed suit and tumbled. Fears of US interest rate hikes and a setback in global markets set off the correction on Dalal Street.