Ahead of the Republic Day holiday-shortened week due to highly volatile domestic market along with investors awaiting the outcome of the upcoming budget announcement, equity markets are bucking the direction from global trends, ongoing quarterly earnings and investment pattern of foreign institutional investors. Will look for instructions. FII), according to analysts.
Analysts have also informed that equity markets may face volatility amid the scheduled monthly derivatives expiry. Meanwhile, the stock markets will remain closed on Wednesday on account of ‘Republic Day’. Additionally, the domestic market is expected to remain highly volatile with investors awaiting the outcome of the upcoming budget announcement.
Ajit Mishra, Vice President (Research), Religare Broking said, “This week is a holiday-shortened one and it is going to be crucial because of the list of events and data. First, the market will react on the earnings. Two index heavyweights – Reliance Industries and ICICI Bank.”
Reliance Industries Ltd on Friday reported its best-ever quarterly performance in October-December 2021, with two ‘rupees’ – hikes in refining and retail, helped by a recent spurt in growth at Jio and one-time gains from sales. Got it. US shale gas business.
While private sector lender ICICI Bank on Saturday reported a jump of nearly 19% in its consolidated profit 6,536 crore for the quarter ended December 2021, helped by higher net interest income (NII) and lower provisions.
Mishra said that as of now, uncertainty about the quantum of rate hike by the US Federal Reserve is rocking the markets across the world and participants expect clarity in the outcome of the FOMC (Federal Open Market Committee) meeting scheduled for January 26. Yes, Mishra said.
“Overall, the monthly expiry of the derivatives contract for the month of January will give strength to the traders,” he said.
Noting that ahead of the Budget, sector-specific expectations will temper even more, Mishra said, “On the earnings front, we have some bigwigs like Axis Bank, Kotak Mahindra Bank, Maruti, Cipla, Vedanta and Larsen & Toubro. There are names who will. Announce your results along with many others.”
Last week itself, weak global sentiment wreaked havoc in the volatile domestic market. Last week, the Sensex tumbled 2,185.85 points or 3.57 per cent, while the Nifty fell 638.60 points or 3.49 per cent, led by a sell-off in global equities amid concerns over inflation and monetary policy tightening.
While the indices saw a 4% rise in the last week, FPIs such as FPIs booked profits in large-caps and opted for high-quality mid-caps.
S Ranganathan, Head (Research) LKP Securities said, “The slowdown in the rural economy coupled with easing oil and raw material prices kept investors cautious as the market turned volatile.” It is likely that the market trend will depend on the rupee-dollar movement and also on Brent crude.
“The results of heavyweights Reliance Industries and ICICI Bank over the weekend will provide the market direction on Monday,” said Siddharth Khemka, Head (Retail Research), Motilal Oswal Financial Services Ltd. Besides this, other companies that are expected to announce their earnings this week are Federal Bank, BHEL, Canara Bank and PNB.
Vinod Nair, Head (Research), Geojit Financial Services, said, “Recent earnings have failed to excite the market, so earnings results this week will be a key factor in determining investor confidence.
“Investors’ focus will be on the upcoming Union Budget, earnings season and state elections in India,” said Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities.
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