Market Ahead, January 18: Top factors that could guide markets this week

While benchmark indices scaled fresh record highs in the last week, high volatility and weak global cues dented the sentiment on Friday, leading to a massive selloff in stocks. However, both Sensex and Nifty managed to gain around half a per cent for the week.

As indices look set to kick off the trading this week, Q3 earnings and global cues will likely guide the market, meanwhile, volatility could stay high in the run-up to Union Budget.

Traders will react to the HDFC Bank Q3 numbers that came out on Saturday wherein the lender posted an over 18 per cent jump in December quarter profit. Besides that, around 193 companies are set to announce their quarterly numbers this week, including a number of prominent large- and mid-caps firms such as -- Reliance Industries, Bajaj Finance, Bajaj Auto, YES Bank, Mindtree, Asian Paints, JSW Steel, SBI Life Insurance, Biocon, Bandhan Bank and Ultratech Cement to name a few.

Meanwhile, on the global front, US President-elect Joe Biden will take office on Wednesday, January 20. Biden had last week unveiled a $1.9 trillion stimulus package that will come up for a vote in the Senate, wherein he would need Republican support to have it cleared. Any development on that front would be closely monitored by investors.

That apart, market participants will also keep tracking latest developments and trends on the Covid-19 pandemic front, especially the pace of the vaccine rollout programme that kicked off on January 16 in the country and for signs of any adverse reactions from the vaccine.

Moreover, movement in crude oil prices, rupee and FII inflows will also be monitored.

Lastly, there will be no dearth of action in the primary markets too as two IPOs, namely - IRFC and Indigo Paints - are slated to open for subscription on January 18 and January 20, respectively. IRFC's IPO is priced at Rs 25-26 a share. Its nearly risk-free model positions the IPO as a safe bet for investors, analyst believe. 

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

Asian share markets retreated from highs on Monday as disappointing news on US consumer spending tempered risk sentiment ahead of a closely-watched reading on the health of the Chinese economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3% having hit a string of record peaks in recent weeks. Japan’s Nikkei slipped 1% and away from a 30-year high. E-Mini futures for the S&P 500 dipped 0.3%, though Wall Street will be closed on Monday for Martin Luther King Jr. holiday.

Tracking weakness in Asian peers, Indian markets too looked set for a tepid start. SGX Nifty futures traded 45 points down at 7.35 am.

On the stock-specific front, Mindtree, IndiaMart, Rallis India and 18 other companies will release their Q3 numbers today.

Wipro has been chosen as the strategic technology services partner by Fiat Chrysler Automobiles.

SAIL's retail portion of the OFS was subscribed 5.22 times on Friday. Investors bid for nearly 12.5 crore shares as compared to the 5.16 crore shares on offer.

DHFL said the Committee of Creditors (CoC) has approved the resolution plan submitted by Piramal Capital and Housing Finance Limited, a Piramal Group company.