TCS, IndusInd Bank, Bandhan Bank, Delta Corp and Tata Elxsi were some of big companies that came out with December quarter earnings this week.Some of these companies posted healthy earnings, but market did not reward them.
For instance, shares of TCS settled 2.44 per cent lower at Rs 1,842 on Friday.
This is even as IT major posted its highest-ever third quarter profit.
Revenues reported by largest IT player was also at highest level in last 14 quarters.This is an indication that 2019 could be negative for entire IT sector.
An expected slowdown in US could hurt these export-oriented companies and best might be behind us.Other than IT, week also saw IndusInd Bank reporting a 5 per cent (YoY) growth in third quarter profit.
The expectations of higher growth did not materialise.
With bank failing to provide fully for ILFS mess, its shares remained quite under pressure post results.
Bandhan Bank too was hit by ILFS provisioning, but it took ILFS exposure as non-performing assets (NPAs).
The bank reported 10 per cent profit growth for quarter.IT stalwart TCS posted profit growth of 24.1 per cent YoY while Tata Elxsi reported a mere 5.14 per cent rise in profits YoY due to margin compression.A look at global scenario suggests that all is not well.
Trade talks between US and China concluded this week.
It was extended to third day, which suggests its seriousness.
The outcome of meeting has not been made public.
This delay in disclosure of outcome of this closed-door meeting points to something unfavourable.
Had it been positive, details would have been out by now.No sooner are details are out, market will react sharply.
Most likely, some disappointment is around corner.Event of weekThe week saw yet another merger of a young bank and an NBFC -- Bandhan Bank acquired Gruh Finance in an all-share deal.
The decision was made primarily with objective of lowering banks promoter holding and expanding its housing finance portfolio.
It will bring down promoters stake in bank to 60 per cent, which is still much higher than 40 per cent-cap Bandhan Bank promoters need to maintain, as per RBI requirement.
IDFC Bank and Capital First completed their merger last month.
A new order is emerging in merger of NBFCs and young banks.
They are pooling war chests to create synergies to be able to compete against larger rivals.Merging is more of a requirement in times of crisis like this, as liquidity is drying up and margins are compressing.
Many such mergers can be expected in this space.
Incumbent private banks may face tough competition from merged entities.Technical outlook Nifty50 has formed a Triangle Pattern, which suggests that Mr Market is not certain in which direction it will move.
Besides, major moving averages (200, 100 and 50 EMAs) are converging, which further confirms that market is in an indecisive phase and about to move sharply.
The likely move will be downwards, given structure of Triangle.
We would advise a 's ell on rise' with a stop loss placed above 11,000 level on Nifty50.Outlook for weekThe market is likely to stay volatile in coming week.
Investors would await details of trade talks between US and China.
These deltails may influence financial markets worldover.
Investors are advised to be on sidelines and book profits at higher levels.
Buying at lower levels would be prudent, given uncertainties and muted corporate numbers.Major results to look out for next week will be those of Wipro, SBI Life Insurance, Zee Entertainment, ICICI Lombard, LT Infotech, AU Small Finance Bank, Mindtree and ICICI Securities.Nifty50 ended week 0.63 per cent higher at 10,794.