A trifecta of corporate earnings, macro data, and global cues will guide the markets this week. Apart from that, pre-Budget newsflow will also impact the movement in benchmark indices.
On the results front, the market will first react to Infosys earnings that were announced after market hours on Friday. Infosys met street estimates of the third quarter’s financial numbers and gave guidance for double-digit growth for the full year. Further, its audit committee gave a clean chit to Infosys on the whistleblower allegations.
This week, a total of 75 companies are scheduled to declare their December quarter earnings which include marquee names like Reliance Industries, TCS, Wipro, HCL Technologies, Mindtree, and HDFC Bank.
Apart from this, traders will also digest all the reports and rumors ahead of the February 1 Union Budget. The onset of the results season and the pre-Budget newsflow, thus, might keep indices volatile.
Market participants will also watch out for the signing of the US-China phase one trade deal scheduled for January 15. The deal would be a huge relief for the global markets, who will hope the deal to be the start of the end of the 16-month long trade war. Besides, investors will also track developments regarding the Brexit and the US-Iran tensions.
On the macro front, CPI inflation data for December is slated to be announced later today while the WPI-based inflation figures will be announced tomorrow.
The Rupee's trajectory, oil price movement, and foreign fund flow will also affect investor sentiment throughout the week.
Globally, Asian shares paused near 19-month peaks on Monday ahead of the expected signing on a Sino-US trade deal. MSCI’s broadest index of Asia-Pacific shares outside Japan barely budged, while Japan’s Nikkei was closed for a holiday. The SGX Nifty, though, was indicating a good start for the domestic indices.
In commodities, oil prices edged down on Monday and Brent crude was down 13 cents at $64.85 per barrel.
Back home, Indian equities closed higher on Friday. The S&P BSE Sensex ended 147 points higher at 41,600. The broader NIfty50 touched its fresh lifetime high of 12,311.2, before paring some gains to end the session 41 points higher at 12,257-mark.
Going forward, analysts recommend that traders should try to buy any dip while keeping close eye on 12,200. On the other hand, if Nifty somehow breaches the level of 12,300 it will lead to short covering move up to 12,400.
And, in the end, here's a trading idea for you by CapitalVia Global Research which recommends buying Marico above Rs 340 for the target of Rs 358 and with stop-loss at Rs 327.