Market Ahead, January 25: Top factors that could guide markets this week

Domestic took a breather last week and ended marginally lower amid volatility. The historic week for BSE Sensex wherein it scaled 50,000 did not end well as it shed 156 points in the five days ended Friday. Its NSE counterpart Nifty, meanwhile, lost 62 points.

Going into the holiday-shortened week, may continue to remain volatile amid monthly derivatives expiry, quarterly earnings and the upcoming Union Budget. Dalal Street would remain closed for trading on Tuesday for the Republic Day holiday.

When the will open today, they’d react to the December quarter results announced by index heavyweight Reliance Industries which saw its profit jump 12.5 per cent YoY to Rs 13,101 crore during the said quarter.

Besides that, some 375 companies are set to announce their December quarter numbers this week, such as Kotak Mahindra Bank, Larsen & Toubro, Axis Bank, HUL, Maruti Suzuki, Dr Reddy’s Labs, IndusInd Bank, IOC, Sun Pharma, Tata Motors, Tech Mahindra, Vedanta and ICICI Bank to name a few.

Meanwhile, on the global front, the Fed monetary policy outcome is due this week. Investors are hoping Fed Chair Jerome Powell will provide reassurance after Wednesday’s policy meeting that $120 billion of monthly bond purchases won’t be tapered any time soon. On the macroeconomic front, investors would also eye the US jobless claims and GDP data, slated to be out on January 28.

That apart, investors will closely track the spread of Covid infections and the deployment of the vaccine. China also started reporting new strain of Covid-19 cases and as a result, imposed partial lockdown in Beijing last week. Meanwhile, the US and several European countries continued to struggle with the Covid-19 crisis.

However, in India, the situation is relatively stable with vaccine drive going smoothly and recovery rate at 96.81 per cent.

Moreover, global cues and movement in crude oil prices, rupee and FII inflows would also influence market sentiment.

Lastly, apart from mainboard indices, action in the primary market would also remain high. Home First Finance IPO that has been subscribed 2.2 times so far will remain open for one more day today. Besides, Stove Kraft’s Rs 413-crore share sale will open for subscription today. The price band for the offer has been fixed at Rs 384-385 per share.

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

Asian shares were on the defensive on Monday as rising Covid-19 cases and doubts over the ability of vaccine makers to supply the promised doses on time soured risk appetite. MSCI’s broadest index of Asia-Pacific shares outside Japan was unchanged, Japan’s Nikkei was down 0.1% and Australian shares were up 0.2%.

However, Indian indices looked set for a gap-up start, contrary to the global mood. Nifty futures of Singapore Exchange were up 107 points at 7.40 am.

On the stock-specific front, Larsen & Toubro, Kotak Mahindra Bank, Aarti Drugs, APL Apollo Tubes, Astec Lifesciences, Can Fin Homes, Chennai Petroleum Corporation and ICICI Securities are among 41 firms slated to announce their December quarter numbers today. Larsen and Toubro is expected to report a strong sequential rebound in performance on the back of a healthy order inflow across verticals.

Grasim Industries said it will enter paints business and invest Rs 5,000 crore over the next three years.

The plan to revive the state-owned telecom companies BSNL and MTNL by merging the two entities is set to be shelved after almost two decades of deliberations on the matter, according to a Business Standard report.

UltraTech Cement reported a consolidated profit of Rs 1,584 crore in Q3FY21, up 122 per cent year-on-year.

Yes Bank reported a profit of Rs 150.7 crore in Q3FY21 against a loss of Rs 18,560 crore in Q3FY20. Net interest income jumped to Rs 2,560.4 crore from Rs 1,064.7 crore YoY.

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