Sensex, Nifty this week: From Q3 earnings to US inflation, factors that may drive Dalal Street

Indian markets ended the first week of the new calendar year 2024 in red terrain amid weak global signals. The next week would mark the start of the Q3FY24 earning season which will kick start with Tata Consultancy Services (TCS) and Infosys reporting their number on January 11. HCL Technologies, HDFC Life Insurance Company, and Wipro are major companies slated to report their numbers in the next week. 

Economic data: On the economy front, investors would be eyeing the data of Index of Industrial Production (IIP) for the month of November, which is scheduled to be released on January 12. Industrial production in India climbed 11.7 per cent year-on-year in October 2023. On the same day, Consumer Price Index (CPI) for the month of December also will be released. Annual retail price inflation in India went up to 5.55 per cent in November 2023 from 4.87 per cent in October. 

Investors will also be eyeing the data of India's foreign exchange reserves, scheduled to be released on January 12. India's forex reserves increased to $620.44 billion on December 22 from $615.97 billion in the previous week. On the same day, data of deposit growth and bank loan growth are also schedule to be released.  

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US market data: On the global front from the US, traders will be eyeing some important macro-economic data, starting with consumer inflation data on January 8, followed by Balance of Trade, and Redbook on January 09, API Crude Oil Stock, Wholesale Inventories and EIA Crude Oil Stocks on January 10, Core Inflation and Initial Jobless Claims on January 11, Monthly Budget Statement, Producer prices in the US and Baker Hughes Oil Rig data on January 12. 

Market Outlook: Deepak Jasani, Head of Retail Research at HDFC Securities, said Nifty rose for the second consecutive session on Jan 5. "At close, Nifty was up 0.24 per cent or 52.2 points at 21710.8. Cash market volumes on the NSE remained high at Rs.1.08 lakh cr. Small cap index rose more than the Nifty even as the advance decline ratio remained high at 1.18:1."  

He said global equities were mostly lower on Friday with investors cautious ahead of the release of the widely watched monthly U.S. jobs report that will help gauge the timing and pace of Federal Reserve interest-rate cuts. "The seasonally adjusted HSBC India Services PMI Business Activity rose to 59 in December from 56.9 in November, highlighting a sharp increase in output that was the most pronounced since September." 

Technical Charts -

Nifty: Jasani also said that Nifty formed a near doji pattern on daily charts suggesting indecision at higher levels. “On weekly charts Nifty fell 0.09 per cent and made a doji after a rise, suggesting possibility of an intermediate reversal. Nifty could remain in the 21,850-21,500 band for the near term and a breach of 21,500 could take it lower to 21365," Jasani said.  

Bank Nifty: Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said: "Exhibiting a robust recovery from the 47,500 support level, Bank Nifty showcases active bullish activity, rebounding from the 14-day moving average support at 47,800. A closing above 48,200 is crucial, as it could propel the index towards 48,500 and 48,800 levels. The immediate support for Bank Nifty stands at 47,800, indicating a key level to monitor in the current market scenario ."  

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