Market Ahead, January 6: Top factors that could guide markets today

In overnight trade, Wall Street ended the choppy session marginally higher ahead of the outcome of the Senate runoff elections in the battleground state of Georgia, which will determine the balance of power in Washington. The Dow Jones Industrial Average closed up 0.55%, the S&P 500 gained 0.71% and the Nasdaq Composite added 0.95%.

The latest exit polls gave a slight edge to the two Democratic challengers who need to win both races for Democrats to gain US Senate control from Republicans. Along with their narrow majority in the House of Representatives, a “blue sweep” of Congress could usher in larger fiscal stimulus. It could also pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes.  

Even in Asia, investors anxiously awaited the outcome of US runoff elections and traded on a mixed note. While Australian shares dipped 0.43%, Japan's Nikkei added 0.1% and South Korea’s Kospi Index topped the 3,000 level for the first time. Futures for the S&P 500 fell 0.07%.

Meanwhile, crude oil prices held overnight gains and traded near $54 per barrel after Saudi Arabia on Tuesday pledged to cut an extra 1 million barrels a day of crude output in February and March. Brent crude futures were up 0.67% at $53.88 per barrel. They had surged 4.9% on Tuesday.

Amid this backdrop, Indian equity markets were set to start Wednesday's session on a muted note as SGX Nifty traded 5 points down at 14,221. Besides this, a report by World Bank predicting a 9.6 per cent contraction in Indian economy in the fiscal year 2020-21 could give market bears another reason to return to the Street today.

Investors will also keep an eye on Markit Services PMI and Fed minutes that are slated to be released later today.

That apart, Finance Minister Nirmala Sitharaman is likely to present the Union Budget on February 1, media reports on Tuesday stated.

Now, a look at the stock-specific developments that are likely to sway the market today:

HDFC Bank on Tuesday said the bank has witnessed a loan growth of 19 per cent to Rs 10,82,000 crore during the third quarter ended December 2020.

Godrej Consumer Products on Tuesday said it expects to deliver "close to low double-digit sales growth" in the domestic market during the October-December 2020 quarter, led by soaps and household insecticides segments.

The Reserve Bank on Tuesday said it has imposed a penalty of Rs 2.5 crore on Bajaj Finance Limited, Pune for violation of various directions, including on recovery and collection practices.

Mortgage lender HDFC on Tuesday said it is planning to raise up to Rs 5,000 crore by issuing bonds on private placement basis to meet its business requirements.