Market awaits Q1 results for direction

Yet again the government has defied the concern and caution raised by IMF, World Bank on economic challenges faced by the country. FM, Jaitley has sidelined the economic slowdown as a transitory impact of reforms such as GST and the demonetization drive.

The World Bank in its latest report said that India's economic momentum has been affected by disruptions from the withdrawal of banknotes and uncertainties around the Goods and Services Tax (GST). The report stated that the Real GDP growth has slowed to 5.7 percent in Q1 FY2017. While International Monetary Fund has projected India to grow at 6.7% in 2017 which is 0.3 percentage points less than its earlier projections.

While on the other hand, large corpus of funds are parked with mutual fund houses waiting to enter the Indian equities market. The rising discrepancy between the price of well-regarded stocks and their forecasted earnings is also a big worry for investors. In case of some stocks, market valuation is highly irrational.

Also, there is a fear among market participants that a major correction is imminent. This correction will enable fresh buys from retail investors looking to put their money in the market during the Diwali season as well as facilitate the mutual fund houses to enter the market at a discount.

Now, all hopes are hanging on the impending quarterly earnings results which will give direction to the market. No matter which direction the market swings, upwards or downwards, the overall mood of the market is very upbeat.