Sentiment softens; eyes on IIP, ears on Infosys

"Sentiment is the poetry of the imagination" - Alphonse de Lamartine

Sentiment seems to have softened and imaginations have stopped running wild. The brakes on the short rally have come with investors stepping back to focus on corporate earnings.

IT major Infosys will unveil its Q2 results. The company is likely to report ~5% QoQ rise in its dollar revenues. PAT growth in Rupee terms should also be pretty good. Infosys’ guidance and management commentary will be important as ever.

US aluminium giant Alcoa’s results seem to have disappointed Wall Street. The stock is down in after-hours trade. US stocks finished mixed in a low volume session. European indices closed flat. Asian benchmarks are mostly in the red.

The start is likely to be muted. Besides Infosys results, the day’s movement will also hinge on the IIP numbers (estimated ~5%). The trading range continues to be between 4700 and 5200. Volatility has subsided marginally and FII flows have turned positive. Still, the near-term outlook is cautious till the Nifty closes convincingly above 5060. Adopt a stock-centric and measured approach as the market is in a transitory phase. Keep some cash handy.