The year 2022 has been a good start with the bulls remaining in hold for another week. The BSE Sensex rose 1,490.83 points to 59,744.65 points and the Nifty50 rose 458.65 points to 17,812.70, with the BSE Sensex rising for the third consecutive week. The rally was mainly supported by banking and financials, though underperforming IT and pharma.
The coming week is going to be very important for the market, as the quarterly results will start with the IT companies. All eyes will remain on the economic data and the situation of COVID globally.
Ajit Mishra, VP-Research, Religare Broking says, “We believe the earnings figures will dictate the market trend and a good start is expected by the IT heavyweights. Even though the market is ignoring the cases of COVID so far, but with the imposition of restrictions by many states, the sentiment may worsen further. “We still have a cautiously positive view of the market,” he said.
Let us now look at 10 key factors that can keep traders busy for the next week.
Earnings
The corporate earnings season will begin next week with 68 companies releasing the quarterly and nine-month scorecards. Market watch will be on TCS, Wipro, HCL Technologies and HDFC Bank, which have 25 per cent weightage in Nifty 50.
IT Stocks
Next week, four IT largecaps – Infosys, TCS, Wipro (January 12) and HCL Technologies (January 14) and one mid-cap Mindtree (January 13) will announce their quarterly results.
The Nifty IT index, considered one of the defensive sectors, has lost 3.5 per cent in the last two sessions after rising 10 per cent since December 21 on the back of Accenture’s strong outlook. Overall the results are expected to be good.
economic data
On the macroeconomic front, CPI inflation data for December and industrial output for November will be released on Wednesday, while WPI inflation data will be released on Friday.
Apart from this, deposit and bank loan growth for Fortnite ended December 24, foreign exchange reserves for the week ended January 7 and balance of trade for December will also be announced on Friday.
fear of omicron
The cases of COVID-19 infection are increasing worldwide due to the Omicron variant. India reported 1.6 lakh cases of COVID on Saturday, which is more than six times as compared to last Saturday, but Dalal Street is not too worried about it as medical experts are talking about hospitalization and lower death rate.
Market sentiment has been supported by reports of “no lockdown” across the country and states imposing stricter COVID restrictions only.
oil prices
In the last three weeks, Brent crude has risen 14 percent to $ 81.75 (January 7) per barrel. Prices fell 5 per cent last week on unrest in Kazakhstan and production slashed in Libya. A further increase in oil prices may add to problems for a country like India, which imports a large amount of oil.
FII flow
After several weeks, foreign investors turned into net buyers, which was one of the key factors supporting the market last week. They bought Rs 1,000 crore last week, while FIIs have sold Rs 75,000 crore in the last two months.
Global signal
Investors will keep an eye on US and China inflation data as well as US bond yields coming out next week. US bond yields rose to 1.76 per cent from 1.51 per cent last week after the FOMC minutes were released recently.
Key Global Data Points for the next week
Euro area unemployment figures for November will be revealed on January 10. On January 12, the industrial production data for November will be released.
Talking about America, the data of wholesale inventories will be released on January 10. At the same time, the data of MBA mortgage applications and inflation (December) will be released till January 12, January 7. On January 14, the data of retail sales and industrial production for December will be released.
In China, December inflation data will be released on January 12, while vehicle sales data will be released on January 13.
technical view
There are signs of a positive trend in the short term. Experts believe that 17,600 is an important support level and if the level of 18,000 is crossed, then there can be a good rally in the coming sessions.
Nagraj Shetty, Technical Research Analyst, HDFC Securities says, “Last week Nifty has formed a long bull candle on the weekly chart and registered a rally for the third consecutive week. The current weekly market action indicates ignoring the bearish weekly pattern. This is a positive sign.” He expects the short term trend to be positive with heavy volatility.
F&O signals
According to experts, option data suggests that Nifty50 may trade in the range of 17,500-18,000, although volatility in the market may increase from the earnings season.
corporate action
Apart from this, several corporate actions may be seen in the next week, including spin-off of GMR Infra on January 11, share buyback of Ajanta Pharma on January 13, spin-off of Motherson Sumi Systems on January 14.
Disclaimer: The views and investment tips of investment experts on Moneycontrol are their own and not that of the website or its management. Moneycontrol advises its users to consult certified experts before taking investment decisions.
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