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Today on Market Ahead: 1. IT companies eye $80-billion pie as contracts up for renewal in 2019 2. FPIs pulled out Rs 83,000 cr in 2018 on oil prices, weak rupee, Fed hikes 3. December quarter results, macro data, rupee, US-China trade talks to guide markets this week
Among key factors heading into trade this week, markets will look out for corporate earning season, macroeconomic data (forex reserves, Index of Industrial Production and manufacturing output), movement in crude oil prices and rupee. That apart, developments surrounding the US-China trade talks on January 7-8 in Beijing, will also be watched by market participants.
The rupee on Friday rebounded by 48 paise to settle at 69.72 against the US dollar in line with smart gains in domestic equities and uptrend in other emerging market currencies.
The Nifty futures on Singapore Exchange (SGX) were trading at 10,895.50 levels, up 117 points or 1.09 per cent in early trade.
This week Tata Consultancy Services (TCS), Infosys, Bajaj Corp, Bandhan Bank, IndusInd Bank, Delta Corp among others are slated to announce their results for the December quarter.
Asian shares got off to a rousing start on Monday as a dovish turn by the Federal Reserve and startlingly strong US jobs data soothed some of the market’s worst fears about the global outlook.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent in early trade, led by a 1.5 per cent jump in Australia. Japan's Nikkei shot up 3.1 per cent, helped in part by a pullback in the yen, while South Korea added 1.5 per cent.
Oil prices started the week strongly on Monday, lifted by optimism that talks would soon resolve the trade war between the United States and China, while supply cuts by major producers also supported the market.
Information technology (IT) services players globally are snapping up contracts worth around $80 billion because these are coming up for renewal this year.
Even though a vast chunk of these deals are in defence, historically Indian players have been the major beneficiaries in the renewal market, garnering share each passing year.
Especially given the fact that a number of deals to be renewed are in areas such as banking, financial services and insurance (BFSI), telecom, technology and communication, and hi-tech, there are traditionally the sweet spots for Indian IT services majors such as Tata Consultancy Services (TCS) and Wipro.
Overseas investors pulled out over Rs 83,000 crore from the capital markets in 2018, after pouring in a record Rs 2 trillion in the preceding year, on the back of rate hikes in the US, rise in global crude prices and rupee depreciation.
Moreover, the flows are expected to be range-bound in 2019 as FPIs may continue with a cautious stance until there are concrete signs of economic recovery and certainty over the formation of a stable government after the general elections.