Market Ahead, January 12: Top factors that could guide markets today

Indian benchmark indices look set to take a pause after Monday's stellar rally, with SGX Nifty futures trading 32 points down at 14,463 around 7.15 am, tracking weak cues from global peers. Besides a financial stability report by the Reserve Bank that raises concerns on the banks' financial health might also dampen the mood.

In overnight trade, Wall Street’s main indices closed lower as investors took some profits while they waited for earnings season to begin and eyed events in Washington with trepidation. Investors believe a bigger stimulus could be delayed as House of Democrats introduced a resolution to impeach US President Donald Trump, accusing him of inciting insurrection following a violent attack on the Capitol by his supporters.

Dow Jones Industrial Average fell 0.29%, the S&P 500 lost 0.66% and the Nasdaq Composite dropped 1.25%.

Tracking a weak finish for Wall Street, markets in Asia opened lower. Japan’s Nikkei slipped 0.48%, South Korea’s KOSPI fell 0.91% and Hong Kong’s Hang Seng index futures lost 0.54%.

While global cues paint a grim picture, the market bulls may take some strength from the strong GDP growth projections for India and development on the Covid vaccine front.

According to a report by UBS global research, India's economy is expected to clock the fastest growth among Asian peers with higher than 11.5 per cent growth in FY22 amid fast falling active COVID cases. Meanwhile, rating agency Icra too sees double-digit growth for the Indian economy at 10.1% in the FY22, however, it cautioned that in absolute terms the country’s GDP would only “mildly” surpass the levels of FY20.

In another positive development, India has signed the first purchase agreement for the government-sponsored Covid vaccination programme with Serum Institute of India. The first consignment of vaccines is likely to be shipped by air on Tuesday morning, said a Business Standard report.

Besides that, market participants will also eye the Industrial Production and Manufacturing Production data for the month of November, along with CPI inflation for December that are slated to be out today. 

That apart, cryptocurrency bitcoin crashed 20.1 per cent to $30,500. The cryptocurrency had more than doubled in price from early December to a record $42,000 on Friday, leading some investment banks to warn of an impending bubble. 

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

Bank stocks are likely to be in focus today after RBI's Financial Stability Report of December 2020 stated that banks' gross non-performing assets may rise to 13.5% by September 2021, from 7.5 per cent in September 2020 under the baseline scenario. The bank-level NPA had touched 14.7 per cent in 1998-99.

Tata Motors share will likely react to a 9 per cent YoY fall in Jaguar Land Rover's retail sales in the October-December period. The sales were, however, up by 13.1 per cent on a QoQ basis.

Gail's board is scheduled to meet on January 15 to consider the proposal of buyback of shares.

The Competition Commission of India (CCI) has approved acquisition of share capital in Adani Green Energy by a subsidiary of Total SE.

Karnataka Bank, Tata Elxsi, Steel Strips Wheels are among 10 other firms scheduled to release their December quarter results today.