Sensex, Nifty could start Tuesday’s session with gains; top factors that may steer indices today

Continuing with the results season, Nestle will announce quarterly results today along with UltraTech Cement, IDBI Bank, and IDFC First Bank.

Domestic equity markets could find themselves opening with gains on Tuesday morning with SGX Nifty trading 60 points higher during the early hours. Monday was a volatile market session with both Sensex and Nifty taking a fall of over 0.50%. Analysts believe that the fall in domestic equity markets, largely aided by slumping bank stocks, was a reaction to the RBI’s financial stability report where the central bank predicts a surge in non-performing assets for lenders. To club with this, geo-political tensions have been rising and the number of coronavirus cases in India too is surging higher each day.

Global markets: Stock markets in the United States ended in the green with NASDAQ surging 1.67%. However, equity markets in Europe were mixed. Asian peers, although, were largely in the green on Tuesday morning. TOPIX and Nikkei 225 were up in the green and so were the equity markets in South Korea, China, and Hong Kong.

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Bank stocks in focus: Reserve Bank of India’s Financial Stability Report cautioned that lenders might see a surge in Non-performing assets. This proved disastrous for bank stocks that were the worst performers on Monday. RBI Governor Shaktikanta Das has still not made it clear whether the central bank will extend the moratorium beyond August, this could worry investors.

Earnings surprise: Earnings so far from the big guns have surprised, with many beating the expectations. Comments coming from the management of various companies too have been optimistic. Kotak Mahindra Bank announced results on Monday where the lender saw net interest income grow by 18% on-year. Tech Mahindra announced that net profit was up 20.9% on-year, beating street estimates. “We expect a breather in the index, after rising for the six successive weeks. Meanwhile, earnings announcements from select Nifty majors and upcoming derivatives expiry of July month contracts will keep the participants busy,” said Ajit Mishra, VP – Research, Religare Broking.

Results today: Continuing with the results season, Nestle will announce quarterly results today along with UltraTech Cement, IDBI Bank, and IDFC First Bank.

Technical take: “The short term trend of Nifty is range bound with weak bias. The momentum in the market could expand only a sustainable move beyond the range of 11250 and 11050 levels in the short term. Upside breakout could pull Nifty towards 11550 and a downside breakout of the range open lower target of 10900-10850 in the near term,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities

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