Mumbai: Domestic share indices are likely to remain volatile next week, with investors watching companies' Jan-Mar earnings, and growth in India's Index of Industrial Production for cues, fund managers said.
Infosys will kick off the quarterly earnings season on April 13, and the government will release data on industrial output growth in February on Thursday.
"Volatility will continue in the market for sometime," said N. Sethuram Iyer, chief investment officer at Daiwa Mutual Fund. "Market is totally directionless. Analysts are expecting (companies') Jan-Mar results to be muted."
Next week, fund houses may pick up shares of information technology companies as weak rupee against the dollar is expected to have boosted the earnings of these firms, which derive a majority of their revenue from exports.
During January-March, rupee depreciated 4.38 percent to end at 50.8700 on March 30. This week, the BSE's Sensex and National Stock Exchange's Nifty ended up 0.5 percent each. On Thursday and Friday, equity markets will be shut for Mahavir Jayanti and Good Friday, respectively.
Fund managers said domestic equities would continue to take cues from overseas markets and global data releases. Asset managers may diversify their portfolio by cherry picking stocks rather than being sector-specific in their approach the next week. "The investment strategy is not a sectoral pattern anymore. Within sectors also there are a lot of variations. So we will have to go for stock picking," Iyer said.

Fund managers said the gigantic borrowing programme for this year will keep government bond yields at elevated levels next week. The 8.79 percent, 2021 bond is expected to move in the band of 8.60-8.80 percent, as against 8.73 percent at close on Monday. Fund managers, however, do not rule out the possibility of yields inching to 9 percent.
"There is again lot of supply coming in next week, so yields will continue to remain elevated." Dwijendra Srivastava, head - fixed income, Sundaram Mutual Fund, said.
"We expect that government spending will ease liquidity in next few weeks and short-term rates may fall 50 basis points."
The government on Tuesday flagged off this year's borrowing with a 180-bln- rupee auction, its biggest weekly debt sale ever, while next week it will auction bonds worth 150 bln rupees. The government will borrow 3.70 trillion rupees through sale of dated securities in Apr-Sep.
The government has pegged its gross market borrowing for 2012-13 (Apr-Mar) at 5.69 trillion rupees. Deducting 900 billion rupees worth of redemption, the net borrowing of the government is at 4.79 trillion rupees.
Asset mangers are gradually increasing investment in papers at the longer end of the yield curve as hopes of the RBI cutting rates are gaining ground. On April 17, the central bank is scheduled to detail the Annual Monetary Policy Statement for the current financial year and expectations are that the RBI will affect at least 25-basis-point cut in repo rate.