The equity markets have opened to a volatile week on the threshold of the earnings season amid uncertainty across global bourses over trade war worries.
The strong US jobs data has buoyed global markets in early trade but the US-China trade war may continue to affect the sentiment through the week and cast a shadow on Indian markets also.
Indian markets have rebounded in early trade after last week'sbearish show. BSE Sensex was trading around 35,965points by 12 pm after up about 270 points or 0.74 per cent. NSE Nifty 50 was holding on to 10,800-point mark, raising 75 points or 0.75 per cent, according to market data.
Apart from the global developments over the US-China trade war, the market will be watching the earnings numbers from IT majors, particularly commentaries on their outlook. The GST Council is scheduled to meet during the week and there could be a decision that will have a bearing on the market, observers say. The crude price movement in response to the global production cut that will influence India's revenue account deficit will be a major factor that the market would continue to watch through the week.
Sector indices of IT and Banking will see extreme volatility through the week as major players are expected to come out with their numbers. About 12 major companies will declare their December quarter results. They include Bajaj Corp, Bandhan Bank, IndusInd Bank, and Kotak Mahindra Bank. Market observers have a slightly dull outlook about the earnings. Any indication of an uptick in the performance will provide strength to the market.
Tata Consultancy Services (TCS) and Infosys will announce their Q3 earnings on January 10 and January 11. More than their performance, the market will be interested in the commentary for the next year that would be a barometer of the global economic health.
"Investors should stay cautious as Q3 earnings season kicks off this week. On the domestic front, the markets will also look forward to the industrial production data for November. US and China inflation data will be watched on the global front," Rahul Sharma, Senior Research Analyst at Equity99, said in a research note.
TCS has informed the exchanges of the meeting of the company's board of directors.
In Q2, Infosys has reported 13.8 per cent sequential growth with consolidated profit at Rs 4,110 crore, and the consolidated revenue grew 7.7 per cent to Rs 20,609 crore.
Representatives of the US and Chinese governments will be meeting on January 7-8 in Beijing to discuss ways to unknot the trade tangle, according to reports. The global markets have remained jittery ahead of the talks that Beijing has initiated after trading tit-for-tat tariff blows with Washington.
The Goods and Services Tax (GST) Council meeting of January 10 is expected to take up the issue of GST on under-construction apartments and houses. The council that Finance Minister Arun Jaitley heads will also take up the matter of raising the taxation floor for micro, small and medium enterprises (MSME) to aid Prime Minister Narendra Modi's new push for MSMEs.
