Market Ahead, February 22: Top factors that could guide markets this week

Markets kicked off last week on an optimistic note but due to lack of any motivation, the selling pressure took over after Nifty50 hit its new lifetime highs. Benchmark indices ended 1 per cent down for the week while the broader markets outperformed.

Analysts fear that any significant correction on Monday can result in a further slide in Sensex and Nifty.

Going into the trade this week, the market trajectory is likely to be guided by global trends in the absence of major domestic events. However, volatility could remain elevated on D-Street due to the expiry of February derivatives contracts on Thursday.

Meanwhile, the focus will be on the macroeconomic data i.e. GDP print for the December quarter that is slated to be out on Friday, February 26, post-market hours. Analysts expect third-quarter GDP data to show signs of recovery that could enthuse bulls on D-Street.

However, rising Covid cases remain a concern and had a hand in sparking profit-taking last week. In the last 24 hours, India reported 14,264 new Covid-19 cases with Maharashtra as the worst hit, following which the government there banned political, religious and social gatherings and imposed a new lockdown in some areas. Going ahead, market participants will track the development in Covid cases and new lockdowns could temper sentiment on Street.

Besides, rising global bond yields and real interest rates in the US were seen as the reason for the tepid activity in equities in the previous week and investors will keep an eye on their movement as rising US bond yields make emerging markets less attractive.

That apart, market participants will also closely follow the US Federal Chief Jerome Powell's testimony to Congress on Tuesday to know the central bank's views on economic progress and Fed’s stance on policy amid surging US Treasury yields. Back home, Street would also look for cues in the RBI policy minutes slated to be out this week.

While the earnings season has almost ended, some 22 companies are still left to post their December quarter numbers, including Stove Kraft, Sanofi India, Rain Industries to name a few.

FII flow, oil price movement and rupee's trajectory will also influence market mood.

Lastly, the action in the primary market would remain high with IPO by Heranba Industries set to open on Tuesday. That apart, shares of RailTel and Nureca, both of which received strong investor response, will list of bourses on Friday, February 26.

And now, let's take a look at the trade setup for today.

Asian share markets inched higher as expectations for faster economic growth and inflation globally batter bonds and boost commodities, though rising real yields also make equity valuations look more stretched in comparison. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1%, Japan's Nikkei recouped 1% and South Korea 0.4%, while E-Mini futures for the S&P 500 were a fraction firmer.

Tracking firm global mood, Nifty futures on Singapore Exchange traded 11.50 points higher at 7.40 am, indicating a positive start for indices back home.

On the stock-specific front, Torrent Power emerged the highest bidder for 51% privatisation of Power Distribution Company in Dadra & Nagar Haveli and Daman & Diu.

Promoter PNB said that it will not participate in PNB Housing Finance's capital raising plans.

The board of Jagran Prakashan will meet on March 2, 2021 to consider the buyback of equity shares.

Inox Leisure commenced commercial operations of multiplex Cinema taken on leave and license basis in Kolkata. The said multiplex has two screens and 422 seats.