Sensex, Nifty this week: From F&O monthly expiry to Q3 earnings, factors that may drive Dalal Street

Last week, Indian markets ended with hefty losses amid tension in the Middle East and weak macroeconomic data. Inflation based on WPI surged to a nine-month high of 0.73 per cent in December 2023 as against 0.26 per cent in November 2023. This week, investors will be focusing on the quarterly results of some major companies across the sectors. Besides the F&O expiry, deposit growth and bank loan growth data in India, along with the GDP growth rate, and goods trade balance in the US are major market events that will keep the markets buzzing. 

Quarterly results: Axis Bank, Bajaj Auto, Coforge, Colgate-Palmolive (India), Havells India, Pidilite Industries, CEAT, DLF, Tata Steel, Tech Mahindra, TVS Motor Company, Cipla, JSW Steel, and SBI Life Insurance Company are among the major names in the Dalal Street to report their numbers in the coming week. 

Hitachi Energy India, Tata Elxsi, Balkrishna Industries, Mahanagar Gas, Birlasoft, Cyient, Intellect Design Arena, and Tata Technologies are some other important quarterly numbers to be released during the week.    

Economic data: Indian markets will remain closed on January 22 and January 26 on account of the Ram temple ceremony and Republic Day respectively. The coming week is expected to be a volatile one for local equity markets on account of the F&O expiry, which is scheduled to take place on January 25, 2024. Traders would also be looking forward to the Deposit Growth data and Bank Loan Growth data during the week.  

US market data: On the global front from the US, traders will be eyeing some important macroeconomic data, starting with Redbook on January 23, followed by S&P Global Composite PMI, S&P Global Manufacturing PMI, and S&P Global Services PMI on January 24. GDP growth rate, Goods Trade Balance, Initial Jobless Claims, on January 25, Core PCE Price Index, Personal Income, Personal Spending, Baker Hughes Oil Rig Count on January 26.   

Market performance: Vinod Nair, Head of Research at Geojit Financial Services, said that amid rising optimism about AI, US markets surged over the weekend. However, domestic markets exhibited a subdued trend influenced by extended holidays, low volumes, and weekly option expiration.  

He added that profit booking was noted in IT and FMCG, while private banks witnessed selective buying post the recent sharp correction and stable Q3 earnings. “Next week, the interest rate decisions of the BoJ and ECB, along with US GDP data, are anticipated to drive the market dynamics,"  Nair said. 

Technical outlook: Rupak De, Senior Technical Analyst at LKP Securities said that the Nifty opened higher and remained volatile throughout the day. The overall consolidation phase may persist for the next few days or until the Nifty stays within the range of 21500-21700. “Only a decisive breakout on either side could initiate a directional move. A significant decline below 21500 might trigger a correction towards 21300 and below. Conversely, a robust breakout above 21700 is needed for a resumption of the uptrend," De said. 

Also Read: Bank Nifty next week: Potential for movement towards resistance at 47,000