Markets week ahead: Q2 earnings, F&O expiry will steer markets

Corporate earnings of nearly 300 companies coupled with expiry of futures and options contracts (F&O) for October series will be keenly watched by investors this week. Overall, the market may turn volatile towards the end of the week as traders will roll over their positions in November series on Thursday.
Quarterly earnings released so far indicate economic recovery, with cement players surprising Dalal Street by posting robust volume and margin growth. Demand revival was also visible from pharmaceuticals and FMCG numbers. IT companies have also managed to perform in line with market expectations.

Overseas portfolio investors also look gung-ho on Indian equities this month. Last week, the BSE Sensex and NSE Nifty ended in the green amid hopes a US stimulus package before the presidential election and expectations of a Covid-19 vaccine by year-end.

The 30-share BSE Sensex gained nearly 703 points, or 1.76%, to 40,685 for the week ended October 23. The 50-share
Nifty index gained nearly 167 points, or 1.43%, to 11,930.
The week ahead is going to be a busy one with earnings from major largecaps and midcap firms, some of which may have a bearing on market behaviour.
F&O expiry is likely to be volatile.

Foreign portfolio investors (FII) have bought shares worth over Rs 15,000 crore in October so far. Any further buying by overseas investors will keep the sentiment buoyed.
On the economic front, traders will also be eyeing infrastructure output data which is scheduled to release on October 30. The figure in August fell 8.5% year-on-year (YoY), following a downwardly revised 8% drop in July.

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