Indian share markets are presently trading marginally higher. Sectoral indices are trading on a mixed note with stocks in the healthcare sector and realty sector witnessing most of the selling pressure. Consumer durables stocks are trading in the green.
The BSE Sensex is trading up 47 points (up 0.2%), while the NSE Nifty is trading flat. The BSE Mid Cap index is trading down by 0.7%, while the BSE Small Cap index is trading down by 0.9%. The rupee is trading at 64.56 to the US$.
Indian markets are trading on a volatile note today ahead of the quarterly result announcements.
As per the news, as many as 699 companies are scheduled to announce their results today.
The list includes companies such as BHEL, BPCL, Coal India, Bajaj Electricals, Bharat Electronics, Escorts, JP Power, Jubilant Foodworks, Larsen & Toubro, Oil India, etc.
But despite the hoopla surrounding the ongoing earnings season, we don't see much to cheer about.
Earnings growth has slid in FY17 despite the lower tax outgo and other income boost. Companies focused on the domestic market too have slowed due to notebandi.
Further, the actual performance for the last quarter of FY17 has been far below brokerage estimates.
This trend can be seen clearly in the chart below:
Earnings in Contrast with Market Trends
This begs the question: How can we make money in a volatile market with little support from earnings trends and brokerages who can't seem to get it right?
Apart from the above, market participants are a keeping tab on the arrival of monsoon rains which is expected to hit the southern Kerala coast by the end of the month.
One shall note that the Indian Metrological Department's (IMD) has forecasted a normal rainfall this calendar year.
Also, as per the Australian Bureau of Meteorology, the rain disrupting El Nino still has a 50% chance of developing later this year albeit on a weaker note. Also, the prospects of Indian Ocean Dipole (IOD) - a phenomenon that strengthens monsoon in the country-forming over the Indian Ocean are looking good.
As per the Bureau five of eight international climate models suggest the tropical Pacific Ocean is likely to warm above El Nino thresholds during the second half of 2017.
The Australian Bureau of Meteorology has predicted the arrival of southwest monsoons in India in the first week of June, deviating slightly from IMD's predicted date of 30th May.
A normal monsoon is critical since most of our farmers are still dependent on monsoon rains for their subsistence.
There's a possibility that the actual rains across the country this year would possibly match or even beat the IMD's forecast.
We will know for sure over the upcoming months.
Having said that, this is certainly not something to speculate on while buying stocks.
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