Market last week
Market was on consolidation mood on account of lack of fresh triggers and caution ahead of budget played on the minds of investors. Globally too, completion of the US-China deal has provided an opportunity for the investors to book profits as the event has ended in-line with the expectation.
A mildly subdued Q3 results in banking sector & heavyweights triggered profit booking in the market. Banks, Auto and Midcaps were consolidating due to marginal slippage in NPAs and growth than anticipated earlier. Also, it was fair to expect a mild consolidation, which may continue for the short-term after the solid performance of the last one-month with fantastic gains in mid & small caps.
The Q3 result had solid expectations but actual results are marginal below expectation for sectors like IT and Banks, leading to cautiousness in the market. We feel that this cautious trend will be maintained in the near-term since a lot has been factored in the market about budget wish list and expectation of revival in earnings growth, but the actual Q3 results being below par. Going ahead, market direction will depend on the actual budget announcements & the performance of Q3 result. Having said that the broad market is still very solid in expectation of re-rate in valuation supported by revamp in earnings growth in the future. Week ahead is eventful with Union budget, US Fed and BoE policy meets, consensus expects US FED and BoE to maintain status quo.