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FMCG Stocks Outlook for the week – 18 to 22.05.2015


(Range-bound next week; Jan-Mar results in focus)
Share indices are seen range-bound next week with Jan-Mar corporate earnings and developments in overseas markets expected to give direction to equities. The market is in a time-bound correction and it will be range-bound next week. Volatility is likely to persist, with traders advised to maintain caution. But this is seen as a good time for long-term investors to buy stocks.

Foreign institutional investors were net sellers in the cash market again, selling stocks worth 383.1 mln rupees yesterday. The selling is seen putting pressure on the markets by participants as they change their exposure in global markets. The movement in the rupee is also seen giving direction to equities. The slight widening of trade deficit will also be a cause of concern for the market. The deficit widened in April to $10.99 bln against $10.09 bln a year ago. Monsoon is also seen as a trigger for the market over the rest of the month.

Yesterday, the Nifty ended at 8262.35 points, up 38.15 points or 0.5%, while the S&P BSE Sensex ended up 117.94 points or 0.4% at 27324 points. Corporate earnings for the quarter ending Jan-Mar are key triggers for their respective sectors and broader equities.

Among Nifty companies, State Bank of India, Asian Paints, Tata Power Co, Bajaj Auto and Zee Entertainment Enterprises will be releasing their Jan-Mar earnings next week. State Bank of India is expected to report stable earnings for the quarter, especially after most public sector banks reported good earnings. The bank is reporting its earnings on next Friday. Asian Paints, which is reporting its Jan-Mar results on Monday. The company is likely to post a 33% on-year growth in consolidated net profit to 3.81 bln rupees in Jan-Mar, owing improving margins due to lower input costs.

Other companies releasing their Jan-Mar earnings next week are Bharat Forge, DLF, Shipping Corp of India, Britannia Industries, Voltas, GlaxoSmithKline Pharmaceuticals, among others.