The second quarter earning numbers by India Inc and demand garnered by state-run Coal India for its mega public float will set the direction for the stock market this week, say analysts.
According to brokers, volatility in the market is expected to increase, as domestic indices are near an all-time high levels. The second quarter earning season would be important for market to take direction for the short to medium term, they said.
"A lot of expectations have been built in the prices and any disappointment on this front may trigger some profit booking," said domestic brokerage house ICICI Securities.
As Infosys Tech has already rung the bell with positive surprise in terms of earning growth, investors would now look forward to numbers of companies like L&T,HDFC and Bajaj Auto , among others that are scheduled to announce numbers this week.
Besides, the secondary market would also keep a close eye on the demand of mega IPO of state-run CIL. Coal India Ltd's Rs 15,000 crore initial public offering.
It is the biggest such offer in the history of Corporate India so far and experts believe there may be some liquidity crunch for a shorter period in the coming week due to this big ticket issue.
"This week the main attraction for retail investors would be the primary market with the mega IPO of Coal India slated to open on October 18," SMC Global Securities Research Head (Retail) Saurabh Jain said.
Equity analysts said that if major selling happens in the coming week ahead of the results, then support levels for the indices would be crucial to watch.
"The stance still remains bullish for the long term, but correction in some stocks is likely to happen," brokerage firm Unicon Financial said its weekly market outlook report.
While investors are booking some profit, as market is near to an all-time high level, ample liquidity in the global financial system as prolonged low interest rates in developed economies continues to support the market, brokers said.
Domestic markets have been consolidating in October after a significant rally in September. The same trend continued in the week gone by as well, with the BSE Sensex remaining flat (falling 0.6 per cent during the week) at 20,125.05.
Foreign Institutional Investors were net sellers in cash markets on Friday for the first time in the month. They have infused a whopping $23 billion so far this year in the local stocks.
On the global front, Wall Street ended mixed on Friday. Dow Jones Industrial Average ended 0.29 per cent lower, while S&P 500 and tech heavy Nasdaq settled in the green with a rise of 0.20 per cent and by 1.37 per cent, respectively.