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Informist, Wednesday, Oct. 23, 2024

By Alina Geogy

MUMBAI – Headline indices are expected to fall for the fourth straight session Thursday owing to selling by foreign institutional investors and weak corporate earnings and management commentary so far, analysts said. The broader market, which had a slight bounce-back Wednesday, is likely to face some more pressure in the upcoming days amid worries of expensive valuations and earnings disappointments, they said.

Foreign institutional investors are expected to continue pulling their money out of the Indian equity market, a research analyst at a domestic brokerage firm said. Cheaper valuations in other equity markets could be a trigger for these outflows, the analyst said.

Foreign portfolio investors have offloaded shares worth INR 760 billion in the Indian equity market so far this month. This amount is way higher than the total money pumped into the market in August and September combined. Foreign institutional investors net sold shares worth INR 56.85 billion on Wednesday, while domestic institutional investors net bought shares worth INR 60.40 billion, as per NSE data.

The Nifty 50 index found support at 24370-24430 points and this zone will continue to serve as a support, Aditya Gaggar, director of brokerage firm Progressive Shares, said in a note. On the higher side, 24670 points will be considered as immediate resistance, he said. On Wednesday, the Nifty 50 and BSE Sensex ended 0.2% lower each at 24435.50 points and 80081.98 points, respectively. The mid- and small-cap indices outperformed, with Nifty small-cap indices rising over 1%.

Investors will react to the quarterly earnings of Hindustan Unilever, which was declared after market hours Wednesday. HUL's net profit for the September quarter missed analysts' estimates. The quarterly earnings of fast-moving consumer goods major ITC and energy firm NTPC are scheduled Thursday. Other companies scheduled to report earnings Thursday include Adani Total Gas, JSW Energy, Godrej Consumer, and ACC.

Conglomerate ITC is expected to report a net profit of INR 50.8 billion in the September quarter, up 3% on year, aided by a rebound in sales of cigarettes and growth in verticals such as consumer goods, hotels, and the agricultural business. The company is expected to post a revenue of INR 178.2 billon, up 0.6% on year. NTPC is expected to report an 11.5% on-year rise in net profit to INR 43.33 billion for the September quarter. NTPC is likely to have benefitted from an increase in regulated equity from thermal capacity additions in Jul-Sept.

Shares of IIFL Finance may fall Thursday as the company reported a consolidated net loss of INR 1.58 billion for Jul-Sept compared to a net profit of INR 4.74 billion a year ago. Shares of Nuvoco Vistas may also decline as the company posted a consolidated net loss for the quarter compared to a net profit in the year-ago period.

Investors may also keep shares of United Spirits under the radar after the company declared an on-year fall in its net profit for the September quarter. Among other stocks, shares of Lemon Tree Hotels would be eyed after the hotel chain operator said it signed a licence agreement for a 60-room hotel in Aurangabad, Maharashtra.  End

Edited by Tanima Banerjee

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