Quarterly earnings from corporates, global trends, and trading activity of foreign investors will guide market sentiment this week, analysts said, adding that benchmark indices may face volatile trends.

“The upcoming release of Q2 results will be closely watched, providing insights into corporate performance. Meanwhile, the escalating tensions between Israel and Iran introduce a significant geopolitical risk, potentially leading to increased oil prices and market volatility. Foreign Institutional Investors (FIIs) have been a key driver of the Indian market’s performance, and their stance will depend on factors such as global economic conditions, and domestic political developments,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

HDFC Bank on Saturday reported a 6 per cent increase in September quarter net profit to Rs 17,825.91 crore on a consolidated basis.

On a standalone basis, the largest private sector lender’s post-tax net grew to Rs 16,820.97 crore during the reporting period, as against Rs 15,976.11 crore in the year-ago period.

“In the absence of any major triggers, market participants will focus on upcoming earnings for direction. First, they will react to the results of banking heavyweights such as HDFC Bank and Kotak Bank. Later, companies like ITC, Hindustan Unilever, BPCL, HPCL, and Ultratech Cement will also announce their earnings,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

Bajaj Housing Finance, Adani Green Energy, Bajaj Finance, One97 Communications, Zomato, Bajaj Finserv and Bank of Baroda would also announce their earnings this week.

Kotak Mahindra Bank on Saturday posted a 13 per cent growth in September quarter profit to Rs 5,044 crore, helped by performance of its subsidiaries.

On a standalone basis, the private sector lender’s net profit for the quarter grew 5 per cent to Rs 3,344 crore, limited by a jump in provisions.

“Geopolitical uncertainty, coupled with sluggishness in the Chinese economy and persistent FII outflows from the domestic markets, have led to caution,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Massive foreign fund exodus from the domestic markets dragged the benchmark indices lower last week.

Last week, the BSE benchmark declined 156.61 points or 0.19 per cent, and the Nifty went lower by 110.2 points or 0.44 per cent.

“The trend of FII selling and DII (Domestic Institutional Investors) buying is likely to sustain in the near-term. The rationale behind FPIs (Foreign Portfolio Investors) selling is the elevated valuations in India and the cheap valuations of Chinese stocks, which the FPIs have been buying aggressively since mid-September,” V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

Mcap of 4 of Top-10 Most Valued Firms Jumps Rs 81,151 Cr Last Week

Four of the top-10 most-valued firms together added Rs 81,151.31 crore in market valuation last week, with ICICI Bank and HDFC Bank emerging as the biggest gainers.

While HDFC Bank, Bharti Airtel, ICICI Bank, and the State Bank of India were the gainers, Reliance Industries, Tata Consultancy Services (TCS), Infosys, Hindustan Unilever, ITC, and Life Insurance Corporation of India (LIC) suffered a combined erosion of Rs 76,622.05 crore from their market valuation.

ICICI Bank added Rs 28,495.14 crore, taking its market valuation to Rs 8,90,191.38 crore.

The valuation of HDFC Bank jumped Rs 23,579.11 crore to Rs 12,82,848.30 crore.

State Bank of India’s market valuation climbed Rs 17,804.61 crore to Rs 7,31,773.56 crore and that of Bharti Airtel went up Rs 11,272.45 crore to Rs 9,71,707.61 crore.

On the other hand, the market capitalisation (mcap) of Infosys slumped Rs 23,314.31 crore to Rs 7,80,126.10 crore.

The valuation of Reliance Industries declined Rs 16,645.39 crore to Rs 18,38,721.14 crore.

The mcap of Hindustan Unilever tumbled Rs 15,248.85 crore to Rs 6,38,066.75 crore and that of TCS diminished by Rs 10,402.01 crore to Rs 14,91,321.40 crore.

LIC’s valuation went lower by Rs 8,760.12 crore to Rs 5,91,418.91 crore.

The mcap of ITC dipped Rs 2,251.37 crore to Rs 6,08,682.29 crore.

Reliance Industries continued to remain the most-valued domestic firm, followed by TCS, HDFC Bank, Bharti Airtel, ICICI Bank, Infosys, State Bank of India, Hindustan Unilever, ITC, and LIC.

(With PTI inputs)

Conflicts in the Middle East have intensified, with Israel now engaged in a multi-front war involving Palestine, Lebanon, Yemen, and more recently, Iran. This escalation comes amidst the ongoing Russia-Ukraine war, which began in early 2022. These crises have led to growing concerns that the situation may evolve into a broader global conflict, potentially even another World War.

Veteran investor Shankar Sharma stirred discussions on geopolitical tensions with a tweet, predicting an inevitable escalated global conflict. He foresees the formation of two opposing blocs in the world, with the US, UK, Israel, and Europe on one side and Iran, Russia, China, and North Korea on the other.

“Apna prediction kilear hai: aaj nahi to Kal, ek World War hona hi hai. US UK Israel Europe: Side 1. Iran Russia China N Korea: Side 2. India? Referee without Penalty Powers,” Sharma said in a post on X (formerly Twitter) on October 2.

The tweet hinted at India’s uncertain role, likening it to a “referee without penalty powers” – a position of neutrality but with limited influence in mitigating the global conflict.

Sharma’s prediction aligns with growing concerns about escalating global tensions, particularly surrounding the US-China relations, the Russia-Ukraine war, and Middle Eastern conflicts involving Iran and Israel. The inclusion of major nuclear powers such as Russia, China, and the US intensifies the potential consequences of such a scenario.

Middle East tensions escalated significantly on October 1, when Iran launched around 200 ballistic missiles at Israel. In response, Israeli Prime Minister Benjamin Netanyahu vowed to retaliate against Tehran, while Iranian officials warned that any further targeting of their country would provoke an even more devastating counterstrike.

Sharma’s comment on India’s role as a “referee” reflects its current foreign policy of strategic autonomy and its ‘neutral’ position. While India maintains strong ties with the West, it has also sought to balance its relations with Russia and other non-aligned nations.

This is evident in its approach during the ongoing Russia-Ukraine war, where India has preserved diplomatic ties with both Russia and Ukraine. Prime Minister Narendra Modi has engaged with both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy, aiming to foster dialogue without explicitly taking sides.

Financial markets have been rattled by the ongoing geopolitical conflicts, with the Indian stock market indices, Sensex and Nifty 50, dropping over 2% each on Thursday. The heightened volatility in the markets have added to broader concerns about the global economic outlook amid speculations over how the conflict will evolve.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.