The Nifty rallied in the last couple of days as fears around geopolitical concerns were absorbed by the market.
At close on Wednesday, Nifty was up 0.62 per cent or 121.5 points at 19,811.35, while Sensex settled at 66,473.05, up 394 points or 0.60 per cent.
The Nifty gained 1.5 per cent for the week driven by frontline stocks like Reliance and HDFC Bank, said Jaykrishna Gandhi, Head of Business Development, Institutional Equities, Emkay Global Financial Services.
The market also found support by the comments from Fed officials who hinted at a lower probability of rate hike going forward.
"The Indian market will kick off the earnings season on Wednesday. Near term, the market, despite geopolitical concerns, seems to be on a strong footing and we believe frontline stocks like Reliance, HDFC bank and FMCG names could drive the Nifty higher," Gandhi said.
IT overall should remain weak in earnings but a lot will depend on the 2H commentary with regard to global tech spend which can drive interest back into IT.
Autos should report peak earnings, especially the likes of Maruti, while cement space should benefit from absorption of price hikes, he said.
Vinay Paharia, CIO, PGIM India Mutual Fund, said on the long-term outlook for Indian equities, “From a short-term perspective, we hold a cautious stance on the market as we expect the near-term corporate earnings growth to moderate due to expected economic slowdown.
"The probable slowdown is likely due to the expected recession in some of the developed markets, elevated interest rates, and ebbing of pent-up demand from the pandemic period."
“For India, weak monsoon, spike in inflation, rising crude prices, and slowdown in FII flows are the key near-term risks. As we inch closer to 2024, we would see increased volatility due to the Union elections scheduled in May 2024. We are of the view that these are transient factors, and we remain optimistic on the long-term outlook for Indian equities," he said.
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