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Domestic corporate earnings and the Reserve Bank of India's second-quarter monetary policy review will drive the sentiment for Indian equities next week, with overseas markets providing further cues to investors. We expect the RBI to keep benchmark interest rates Unchanged, but to lower banks' cash reserve ratio to provide immediate liquidity. CRR is the minimum cash level that banks are required to park with the central bank. Investors have already factored in the likely cut in CRR, and therefore the market may not see any a sharp movement if the reduction is announced. Overseas markets will lend cues to investors on Monday. US index futures pointed to a lower opening on the Wall Street Yesterday, as investors awaited the release of third-quarter gross domestic product data.
Back home, this week, the two indices slipped 0.3% each, as investors focussed on companies' earnings. We expect the Nifty to trade between 5600 and 5750 next week, and expect the index to test the 5800 level only if it firmly trades above 5750. Among Nifty companies, Bharat Heavy Electricals, Dr Reddy's Laboratories, Grasim Industries, Maruti Suzuki India, Power Grid Corp of India and Wipro will release their Jul-Sep results next week. We expect Maruti to post lacklustre earnings for the fifth consecutive quarter in Jul-Sep. A hit on the company's sales volumes due to labour unrest during Jul-Sep may drag down its net profit by 19% on-year to 1.96 bln rupees.
Sterlite Technologies also may slip as the company's Jul-Sep net profit tumbled 67% on year to 42.1 mln rupees. Stocks of Fag Bearings India could trade weak as the company, post market hours yesterday, reported a net profit of 369.4 mln rupees for Jul-Sep versus 454.1 mln rupees a year ago. Some of the key non-Nifty companies reporting their results next week are Havells India, Glenmark Pharmaceuticals, IRB Infrastructure Developers, KEC International, Satyam Computer Services, Thermax, TVS Motor Co, Titan Industries, GlaxoSmithkline Consumer Healthcare, Godrej Properties, Hexaware Technologies, Apollo Tyres, Jet Airways (India), Rural Electrification Corp, and Godrej Consumer Products.
