In sync with most global peers, Sensex and Nifty logged healthy gains of half-a-per cent each on Friday. On a weekly basis, however, both declined 1 per cent.
Going into a new week, earnings, macro data and global market movement will be most important triggers the market will be reacting to. Here’s a look at the factors that are likely to sway proceedings in the week ahead:
December quarter earnings season kicks off this week. TCS, Infosys, IndusInd Bank and Bajaj Corp will announce their numbers during the week, setting the tone for the market. As the second quarter numbers remained subdued, the market will need some upbeat third quarter numbers to sail through amid concerns over weak global economic growth.
The US-China talk
A vice-ministerial-level meeting between the two countries is expected to take place this week. After the US President said that Washington and Beijing were conducting the trade negotiations at the highest levels, there is hope that a solution to trade war is close. Every positive development on this front will give further boost to markets across the world.
India’s IIP print
India’s industrial production data for November will be out on Friday. Industrial output grew at an 11-month high of 8.1 per cent in October, underpinned by mining, power and manufacturing sectors coupled with higher offtake of capital goods as well as consumer durables. The manufacturing sector, which constitutes 77.63 per cent of the index, recorded 7.9 per cent growth in October against 2 per cent a year ago. A positive IIP print will be a signal of robust economic growth, which will, in turn, prop up the rupee and attract FII inflow.
Markets will be closely looking at December US non-farm payrolls report, inflation data, ISM Non-Manufacturing PMI data, Japan’s consumer confidence data and China’s inflation data for December and US balance of trade data for November slated for release during the week.
US stocks, especially the tech ones, will be in focus during the week after Apple’s warning that China’s economic slowdown and the trade war have hit its business, which triggered a rout in US equities and a selloff in most global markets. As per Reuters, Apple shares tumbled 10 per cent last Thursday, resulting in the S&P Technology index’s worst day since August 2011. A fall of this magnitude in one the most liquid and valuable stocks of the world has clouded the corporate earnings picture and made investors nervous.
Friday’s rally on Dalal Street showed the bulls and the bears are having a tug of war and analysts are of view that Nifty might turn sideways with a positive bias for a couple of days before seeing any directional move. “Nifty has been moving in a range between 10,950 and 10,550 levels, forming a significant barrier and a breach on either side would decide the new trend. Nifty’s support for the week is seen at 35,050/10,520 while resistance is seen at 36,320/10,930,” said Vaishali Parekh, senior technical analyst at Prabhudas Lilladher.