NEW DELHI: The domestic equity benchmarks Sensexand Nifty managed to close the week gone by on a positive note despite losses in the last two trading sessions.
However, gains remained capped due to lack of any directional cues from global markets and soft third quarter earnings.
On a weekly basis, Sensex advanced 315 points or 0.88 per cent and Nifty inched up 68 points or 0.63 per cent.
Weakness in Indian rupee, following rally in global crude oil prices, made investors wary and look away from Indian equities.
Going into the new week, earnings, global sentiment and macro numbers to remain among most important factors that may dictate market movement this week.
Here is a list of some of the key factors that may sway market mood during the week:
RIL, HDFC BankNSE 0.16 %, HUL earnings: The week will see December quarter earnings of heavyweights, including Zee EntertainmentNSE -0.07 %, Hindustan UnileverNSE -0.94 %, Reliance IndustriesNSE -0.85 %, WiproNSE 0.91 % and HDFC Bank. Analysts think that earnings so far have not been able to excite bourses, hence the numbers of these company will among most important triggers and they can alter the course of the market.
Inflation numbers: India’s wholesale and retail inflation prints for December will be released on Monday. Both these numbers are important indicators of the health of the economy and may dominate market movement. Retail inflation, which is calculated on the consumer price index (CPI), plunged to a 17-month low in November at 2.33 per cent, mainly on account of decline in prices of kitchen essentials. On the other hand, country’s wholesale inflation fell to a three-month low of 4.64 per cent in November, driven down by the decline in prices of food articles, especially vegetables, and some easing in rates of petro products. Experts are expecting the numbers to be broadly in the same range for December as well.
Global sentiment: Fourth-quarter results of heavyweights, such as Micron Technology, Netflix, Citi, JPMorgan and Wells Fargo, will come out this week. Global markets will hope for upbeat numbers from them since they will either bolster the view of a slowdown in economy or infuse positivity in the market.
Global macros: Many significant global macro numbers, including China’s exports and imports data for December, US balance of trade data for November and retail sales for December, are slated to be released this week. Besides, China might release its fourth quarter GDP data this week. The US Federal Reserve will issue the Beige Book of Economic Condition, which is a report of current economic conditions, trends and challenges in the US, on Thursday.
May’s deal: The British Parliament will vote on Prime Minister Theresa May’s Brexit withdrawal deal on Tuesday. The chaos around Brexit can bring discomfort to European markets, which may degenerate to global stocks. As per Reuters, the agreement, which May and EU leaders say cannot be renegotiated and is the only one available, will almost certainly be rejected. If so, uncertainty, paralysis and the likelihood of a disorderly ‘no deal’ Brexit will rise.
US-China trade deal: Even as the last week’s talk between the US and China did not reveal much for the market, the optimism is still in air. As a key trade data- China’s export growth- will be out this week, a soft data may push Beijing to be more accommodative with fiscal policies as well as with the US demand on trade.
Crude’s course: Oil prices fell nearly 2 per cent on Friday, but ended the week higher. Hopes of a Sino-US trade deal have given a leg up to oil prices and as the US signalled that more waivers for Iranian oil imports after the reimposition of US sanctions is unlikely, India has something to worry about in the wake of an ongoing supply cut by Opec and its ally Russia.
Technical outlook: Nifty settled below its 200-day moving average on Friday. The lower-level buying suggested that the fight between the bulls and the bears is even and market may swing in either direction. “Market has been in a rangebound move with Nifty having 10,787 as a fulcrum point. The support for the week is seen at 35,330/10,580 while resistance is seen at 36,550/10,960,” said Vaishali Parekh, senior technical analyst at Prabhudas Lilladher