The markets closed a lacklustre week ended 6 July with marginal gains. The Sensex gained 91 points, or 0.5 percent, to close at 17,2521.12 while the 50-share Nifty ended at 5,317, up 0.72 percent or 38 points.
However, on a weekly basis, midcaps and smallcaps outperformed the Sensex with gains of 2.6 percent and 4.3 percent, respectively.
Markets are likely to take cues from industrial output and monthly inflation data and the start of the earnings season next week, according to analysts.
The government is scheduled to release May IIP output and June headline inflation numbers on Thursday and July 16, respectively.
"The 50-share Nifty is likely to be rangebound between 5,200 and 5,400 with stock-specific movement in hotels, fertilizer and agriculture stocks in the coming week," A.K. Prabhakar, Senior Vice President - Equity Research at Anand Rathi Securities, said.
Infosys and Tata Consultancy Services will announce their first quarter results on July 12. Markets maybe choppy and some profit-booking cannot be ruled out ahead of the big event, he added.
Revenue growth for the top five players is expected to be 1-3 percent in dollar terms.
"Of the larger companies, Infosys and Wipro are expected to report lower growth, while TCS is expected to report revenues on the higher end of the growth band," ET reported.
"Infosys which gets 71.1 percent of its revenue in dollars is expected to gain most from the rupee's depreciation, compared to say TCS which gets about 59% of its revenue in dollars," the report added.
The BSE IT Index has been under pressure on account of rising uncertainties for the sector on the back of the eurozone debt crisis which is far from over and a slower-than-anticipated improvement in US economic growth.
Despite the depreciation of the rupee by 9 percent during the quarter, the BSE IT index, which has corrected 5.2 percent, has underperformed the broader market indices.
Mumbai-based brokerage Sharekhan remains cautiously optimistic on the IT sector with TCS from the largecaps and NIIT Tech in the midcaps as its top picks.
The rupee is expected to consolidate further and head towards 55.70-56.00 per dollar next week, while bond yields are expected to hold in a range ahead of the IIP and inflation data due later in the week, Reuters reported.
"Industrial output data is likely to be positive with around 2 percent growth based on core sector growth of 4 percent while inflation is expected to come around 7.5 percent for June," Prabhakar added.
The markets on Monday are likely to react to the tepid US jobs growth data which led to a strong correction on Wall Street on Friday. The weaker-than-expected numbers highlight fears of a slowdown in US growth.
"About 80,000 non-farm payroll jobs were added in June, the third straight month employment grew by less than 100,000 jobs," a Reuters report said, adding that Monday (July 9) will be primarily marked by the reaction to the US jobs data with the performance of the euro key, according to traders.
The Nifty has moved in a narrow band of 70 points in the previous week but experts are hopeful that the index will break out of the range on either side next week with all the events lined up.
Ashwani Gujral of ashwanigujral.com recommended investors be cautious next week as markets may keep updating trailing stops.
"I expect the bank index to get another 250-300 points on the upside and the Nifty is expected to hover around 5,400 levels for the coming week," he said.
"On the Nifty, 5,270 is the ideal stop loss for all long positions and if we get some positive news, 5,380-5,400 levels seem very likely. But the movement will be choppy and rumour-driven, so people need to have clear stop losses and use them on a closing basis," Gujral added.
News beureu.
However, on a weekly basis, midcaps and smallcaps outperformed the Sensex with gains of 2.6 percent and 4.3 percent, respectively.
Markets are likely to take cues from industrial output and monthly inflation data and the start of the earnings season next week, according to analysts.
The government is scheduled to release May IIP output and June headline inflation numbers on Thursday and July 16, respectively.
"The 50-share Nifty is likely to be rangebound between 5,200 and 5,400 with stock-specific movement in hotels, fertilizer and agriculture stocks in the coming week," A.K. Prabhakar, Senior Vice President - Equity Research at Anand Rathi Securities, said.
Infosys and Tata Consultancy Services will announce their first quarter results on July 12. Markets maybe choppy and some profit-booking cannot be ruled out ahead of the big event, he added.
Revenue growth for the top five players is expected to be 1-3 percent in dollar terms.
"Of the larger companies, Infosys and Wipro are expected to report lower growth, while TCS is expected to report revenues on the higher end of the growth band," ET reported.
"Infosys which gets 71.1 percent of its revenue in dollars is expected to gain most from the rupee's depreciation, compared to say TCS which gets about 59% of its revenue in dollars," the report added.
The BSE IT Index has been under pressure on account of rising uncertainties for the sector on the back of the eurozone debt crisis which is far from over and a slower-than-anticipated improvement in US economic growth.
Despite the depreciation of the rupee by 9 percent during the quarter, the BSE IT index, which has corrected 5.2 percent, has underperformed the broader market indices.
Mumbai-based brokerage Sharekhan remains cautiously optimistic on the IT sector with TCS from the largecaps and NIIT Tech in the midcaps as its top picks.
The rupee is expected to consolidate further and head towards 55.70-56.00 per dollar next week, while bond yields are expected to hold in a range ahead of the IIP and inflation data due later in the week, Reuters reported.
"Industrial output data is likely to be positive with around 2 percent growth based on core sector growth of 4 percent while inflation is expected to come around 7.5 percent for June," Prabhakar added.
The markets on Monday are likely to react to the tepid US jobs growth data which led to a strong correction on Wall Street on Friday. The weaker-than-expected numbers highlight fears of a slowdown in US growth.
"About 80,000 non-farm payroll jobs were added in June, the third straight month employment grew by less than 100,000 jobs," a Reuters report said, adding that Monday (July 9) will be primarily marked by the reaction to the US jobs data with the performance of the euro key, according to traders.
The Nifty has moved in a narrow band of 70 points in the previous week but experts are hopeful that the index will break out of the range on either side next week with all the events lined up.
Ashwani Gujral of ashwanigujral.com recommended investors be cautious next week as markets may keep updating trailing stops.
"I expect the bank index to get another 250-300 points on the upside and the Nifty is expected to hover around 5,400 levels for the coming week," he said.
"On the Nifty, 5,270 is the ideal stop loss for all long positions and if we get some positive news, 5,380-5,400 levels seem very likely. But the movement will be choppy and rumour-driven, so people need to have clear stop losses and use them on a closing basis," Gujral added.
News beureu.
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