Karnataka elections outcome, Q4 numbers to drive markets this week

Mumbai, May 13: Domestic stock market this week will be guided by a range of factors like Karnataka election results, inflation data, crude oil price movement and quarterly earnings by some blue chip companies, say experts.
Jimeet Modi, Founder & CEO, SAMCO Securities, said, “Although everyone is looking out for outcome in the Karnataka elections which might have insignificant effect on the market, the real threat may emerge from the Iran-Israel conflict which can escalate into a war-like situation after the withdrawal of US from the nuclear deal with Iran.”
The Street will watch out for cues on the earnings front that are lined up in the upcoming week. Over 380 BSE companies will be declaring their numbers for the March quarter.
Blue Star, Bombay Dyeing, HUL, South Indian Bank, Lupin, Reliance Communications, Shemaroo Entertainment, Snowman Logistics, Hindalco, Prataap Snacks, ITC, Tata Steel, TVS Motor, Bajaj Finserv and Bajaj Finance, Coffee Day Enterprises, Amara Raja Batteries, Inox Wind, Balampur Chini, and Thermax, among others are a part of this list.
Big reactions
Few of the banking names could be on the Street’s focus after they reported their March quarter numbers after market hours on Friday. For instance, Canara Bank, UCO Bank and Oriental Bank of Commerce posted their respective losses for the quarter on the back of sharp rise in NPAs or increased provisioning too.
Pharma stocks in focus
Pharmaceutical stocks could react on Monday following US President Donald Trump’s announcements regarding the drug policy. They had been under pressure on Friday on the back of a likely strain on profits due to his policies.
Trump unveiled his blueprint to lower drug prices, called “American Patients First,” in a highly anticipated speech on Friday. However, his actions weren’t as biting as his words suggested. The proposal included few immediate actions the administration would take but none that would bring any massive reforms. Wall Street welcomed the letdown, relieving health-care stocks of the pressure they had been feeling.
Index heavyweight stock, Infosys, could be on the focus of investors after a senior level exit was announced by the firm on Friday.
The company said that Ravi Venkatesan, Independent Director, would step down from the company’s board to accept “an exciting new role”. Venkatesan became an Independent Director in 2011 and served briefly as co-chairman.
“I joined the Board at a time when Infosys was beginning the complex journey of transitioning from founder-led to professional management. This was also a time of tectonic industry shifts. I am pleased that this mission has been accomplished. Infosys is strong, in good hands, and is gaining momentum,” said Venkatesan in a statement. He called his seven years on the Infosys board “exciting, rewarding and eventful”.
Corporate Action
Apart from Board meetings to discuss financial results, the Street could watch out for companies that will have other corporate actions on their agenda. Hexaware, Nestle, ACC, Esselpack Pro, and Sundaram Fasteners, among others, will be meeting to discuss their dividend issues.
Technical factors
The Nifty formed a bullish candle on the daily as well as weekly charts. Formation of a bullish candle negates the formation of a bearish candle formed in the previous trading session. Hence, investors are advised to stay cautious ahead of the Karnataka election outcome next week.