Results Season Ahoy!

After some good action over the past couple of months or so, the market remained a bit muted in the last fortnight. All the leading indices closed in the red, with the Sensex and Nifty having gone down by 1.55 per cent and 1.32 per cent respectively. The IIP was up by 2.70 per cent for the month of August 2012 on a YoY basis. This growth has been seen after several months of stagnation. On the other hand, the WPI also witnessed a jump of 7.81 per cent. The rise in the WPI was mainly on account of rising wheat and diesel prices. The Q2FY13 results season has begun, and the markets are looking forward to an improved performance from India Inc.

On the global front, the markets remained on the positive zone across all the regions. In the last fortnight, we had seen an improvement in the jobless claims in the US, which was able to send positive vibes through Europe and Asia. The US stocks witnessed good rallies, giving the Standard & Poor's 500 Index its biggest gain in a month on Tuesday, October 16, as industrial production in the region rose more than the forecast. The corporate earnings in the region too topped the estimates. On the European front, the stocks witnessed an upward move. Two German lawmakers said that the country is open to Spain seeking a precautionary credit line from Europe's rescue fund. Also, investor confidence in Germany advanced more than expected in the month of October.

The Asian stocks also advanced on the back of better-than-expected data in the US (the region's largest trading partner) and after Spain retained its investment-grade credit rating from Moody's Investors Service. Going forward, the markets will look forward to the Chinese Q3 GDP numbers on October 18, the US Fed policy on October 24, as well as the policy meeting of Bank of Japan that is expected to be held on October 20. These events will be watched closely by the investor fraternity across the globe.

Back home, on the sectoral front, almost all the indices have closed in the red, barring just two. With the temporary blip that the markets are witnessing at this point of time, safe havens have again come into the limelight. The BSE FMCG index was an outperformer in the last fortnight, going up by more than four per cent. This was followed by the BSE Healthcare index, which was up by 2.96 per cent. Leading the underperformers list is the BSE IT Index (-5.77 per cent). This decline was primarily due to Infosys, which witnessed a sell-off after revising its guidance. The BSE Teck index (-4.74 per cent) and the BSE Auto index (-2.81 per cent) took second and third positions respectively in terms of underperformance.

The money inflows remained strong, with FIIs pumping in a net Rs 9636 crore, taking the total to Rs 93329 crore on a year-to-date basis. DIIs ended the fortnight in the red, selling off equities worth Rs 1649 crore during the last fortnight.

The results of India Inc. will be a major trigger for the markets. The pending reforms on the government’s agenda is another major factor that will drive the markets. Wait for the rally to start afresh. It is just about time that it happens.