Key corporate results to dictate near-term trend

Earnings from some top Indian firms are in focus after the barometer index BSE Sensex tumbled to 4-month low on Friday, 14 January 2011. High volatility has been the order of the day, which has spooked traders. The market sentiment has been weak due to fears of aggressive interest rate rise in 2011.



Analysts see corporate profit margins to be under pressure in the coming months due to higher commodity prices, rising cost of debt, surging wages and increased competitive intensity across sectors.

Foreign institutional investors (FIIs) have offloaded shares worth a net Rs 1869.90 crore in this month so far (till 13 January 2011). FIIs had bought equities worth Rs 2049.60 crore in December 2010, much lower than an inflow of Rs 18293.10 crore in November 2010.

L&T, Axis Bank and Tata Consultancy Services (TCS) report Q3 results on Monday 17 January 2011, to be followed by state-run gas transmission and distribution firm GAIL (India) on Tuesday, 18 January 2011. Bajaj Auto and HCL Technologies are due to report earnings on Wednesday 19 January 2011. Reliance Industries (RIL), ITC, Bharat Heavy Electricals and Punjab National Bank (PNB) are due to report Q3 results on Friday, 21 January 2011.

Increase in inflation in December 2010 has reinforced fears of a rate hike by the Reserve Bank of India (RBI) at a policy review on 25 January 2011, with bank stocks tumbling over the past few days. As per a poll by Capital Market, economists widely expect 25 basis points increase each in repo rate and reverse repo rate at January policy review.