InvestorQ : What are the major sectoral and company level triggers for the week commencing on January 20, 2020 and how to position for making the best of it?
NISHA Nayak made post

What are the major sectoral and company level triggers for the week commencing on January 20, 2020 and how to position for making the best of it?

Answer
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8 months ago


The coming week has some interesting cues for companies, results and for corporate data flows with the following key triggers likely to drive the markets.

· The oil sector is likely to react this week to RIL results and UBS oil report. RIL reported record profits but also weak GRMs. Oil stocks could react negatively to RIL’s lower GRMs but there is likely to be a positive reaction to the UBS upgrade of Oil and Gas stocks.

· HDFC Bank results were another trigger late last week. The stock could react positively to the stellar results for Q3. HDFC Bank to react positively to 33% growth in profits but NPA accretion / higher provisions could be an issue, although it is too marginal to matter.

· The week could see a string of banking results this week. Key results announcements for the week include results announcement for L&T, Kotak Bank, ICICI Bank, SBI Life, Asian Paints, PVR, HDFC Life, HDFC AMC etc. All are likely to be significant for markets.

· Macro impact on markets in terms of earnings growth indications to be watched. Q3 Nifty earnings to grow at 20% but revenue growth could still muted. The second challenge will be that the corporate tax cut impact could top out this quarter.

· Keep an eye on L&T margins and order book growth for the December quarter and the guidance. L&T order inflow guidance to be lower by 30% due to weak government spending and state level issues and that could be negative for capital goods.

· A key trigger will be the telecom sector reaction to AGR deadline which falls on 23 January 2020. This could be critical as the deadline is to pay Rs.147,000 crore to the DOT and any extension could be seen as a saving grace.

· Focus on specific telecom stocks like Bharti and Vodafone Idea will continue during the week. Capital infusion for Vodafone Idea is a major issue as Vodafone PLC and Birlas have refused to bring in fresh capital. This could be the key to its survival and also for its creditors to recover their dues.

· Progress on Yes Bank capital raising and rating shifts on debt could also be a trigger for the stock during the week. Positive developments on equity raising hold the key as core capital ratio at close to 8% is worrying

· DGCA to release air traffic data for December 2019 and that could hold the key to airline companies’ performance. The sharp growth in flyers will be the key to sustaining top line growth for most of the aviation companies.