Dominic Rebello is Senior Correspondent and covers equity and financial markets
The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) declined for the third consecutive week due to continuous selling by Foreign Institutional Investors (FII), declining crude oil prices, lower than expected Q3 results and the weakening of the rupee.
Last week the BSE Sensex fell by 19 points to 24,435, while the Nifty 50 index was down by 15 points to close at 7,422 level.
During the first four trading sessions of last week the indices plunged by over 2%, but on Friday the last trading session of the week, the Sensex rose by 473 points, while the NSE Nifty rose by 145 points due to recovery in the rupee and firm global cues, that helped wipe out most of the losses. “Nifty made a strong comeback on Friday and closed up by nearly two percent; thanks to firm global cues and strength in rupee against the US dollar. It was a broad base recovery with auto and banking leading the pack alongside metal and energy counters. Besides, rebound in crude from its multi-years low, added to positivity,” said Jayant Manglik, President, Retail Distribution, Religare Securities Ltd.
“The next week is going to be very volatile, owing to the F&O series expiry, scheduled on January 28. In next leg of earnings, some of the prominent names like HDFC Bank, Havells, HDFC, IDFC Bank, Bharti Airtel, Dabur, ICICI Bank, Titan, L&T, NTPC, and Siemens will announce their result alongside with others. We expect Nifty to extend its rebound in the coming week as well with immediate hurdle at 7550 level; however, stocks will continue to trade volatile so traders should uphold caution and avoid temptation to jump into a position merely on the basis price correction. They should focus on quality stocks, which are hammered in the recent correction and their fundamental triggers are intact,” he added.
“The weakness in Chinese economy and the falling crude prices have taken a toll on markets across the world, in the past couple of weeks. The resultant outflows of funds from India have impacted domestic markets also. The global scenario remains uncertain. The falling crude and commodity prices have a beneficial impact on Indian economy in form of a better fiscal deficit number and controlled inflation. Further reforms on the Government side will greatly improve sentiments. We also expect the measures taken by the Government till date, to start having a positive impact at the ground level, in due course,” said Dipen Shah, Senior Vice-President & Head of Private Client Group Research, Kotak Securities
The results of blue chip companies like HDFC Bank, Colgate, BEL, Maruti Suzuki, ICICI Bank, Dabur, Bharti Airtel, Yes Bank, TVS Motor and Larson & Toubro is expected this week, coupled with the F&O expiry and global market trend are some of the factors that will steer the stock markets in this truncated week. Investors are also keenly tracking the two-day US Fed policy meet on Tuesday and Wednesday.
"It is unlikely that the Fed will hike rate at this week's policy meet, given the chaos in the global market. The domestic market may undergo a consolidation phase with high volatility in the near term as we are at the doorstep of an futures and options (F&O) expiry," said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services Ltd.
“The markets will focus on the earnings season as majority of the numbers will come out before the close of the month. The market is expected to trade with an upward bias with intermittent profit booking. Market is likely to crawl higher in the coming week. There will be lot of stock specific movements based on the quarterly scorecard of the company. Nifty ended the week flat with opening and closing more or less at same levels. Nifty50 closed at 7422.45,” said Jimeet Modi, CEO, SAMCO Securities.
“Macroeconomic data, trend in global markets, investment by foreign institutional investors (FIIs), the movement of rupee against the dollar and movement of crude oil prices and also depend on Q3 results of companies like HDFC Bank, Colpal, BEL, Maruti Suzuki, ICICI Bank, Dabur, Bharti Airtel, Yes Bank, TVS Motor, Larson & Toubro etc. will dictate trend of the market in near term,” said Vivek Gupta, CMT, Director Research, CapitalVia Global Research.