Q3 earnings, budget expectations to dictate equities this week

New Delhi: Equity market progress this week will broadly hinge on ongoing quarterly corporate results and expectations being built around the upcoming Union Budget, according to analysts.

Investors in domestic market will closely watch quarterly earnings from companies such as Kotak Mahindra Bank, Bank of Maharashtra, Axis Bank, Canara Bank and Bank of Baroda this week.

The BSE gauge Sensex logged a hefty 345.65 points or 0.83 per cent gains in the previous week. The recent rally has been enthused by a host of factors, mostly global, like cooling of US-Iran tensions and signing of an initial trade deal between Washington and Beijing to defuse their 18-month trade tussle.

The Indian market is now looking beyond global factors to focus on earnings announcements and upcoming budget, as both are expected to underpin the sentiment. "Going ahead, investors should remain cautious as markets are at all-time high and should expect stock-specific action as Q3 earnings season progresses.

Also expectations to the run up to the budget are expected to drive certain sectors related to agri, rural, fertilisers, PSUs, infra and construction. This week key results to watch out for would be ICICI Bank, JSW Steel, Zee, Havells, HDFC AMC," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said.

Market will also be guided by other key factors like Brent crude movement, rupee-dollar trend and foreign investment flows. "Overall expectation is that Q3 is likely to provide a strong push to earnings growth trajectory for FY20 and 21.

Further, market is expecting strong measures from the government from budget," Vinod Nair, Head of Research, Geojit Financial Services said.

On Monday, all eyes will be tracking the movement in TCS shares, as the IT major after-market hours on Friday reported a muted 0.2 per cent growth in consolidated net profit at Rs 8,118 crore for the third quarter.

Shares of Reliance Industries will also be in focus as the company on Friday after market hours posted a 13.5 per cent rise in consolidated net profit to a record Rs 11,640 crore in the October-December period of FY2019-20.