Moneycontrol Bureau
The market closed moderately higher amid consolidation last week. This was despite profit booking on Friday due to worry over likely postponement of the Budget date and after re-introduction of H1B Visa Reform Bill in the US Congress by two lawmakers. The NSE Nifty gained 0.7 percent but the broader market outperformed smartly with the Nifty Midcap index rising 3.5 percent in the week gone by.
The upmove is likely to continue amid volatility in the coming week and also till the announcement of Union Budget on hopes of tax sops, especially after demonetisation and ahead of five state elections (Uttar Pradesh, Punjab, Goa, Manipur and Uttarakhand), experts feel. According to them, demonetisation impact on overall earnings will be closely watched. They expect Nifty to be around 8300-8400 level next week.
"Before the next quarter results, which are likely to be equally going nowhere, the attention of the market will be more on the Union Budget (February 1) and state elections results and the fallout of all those things," Aashish Somaiyaa of Motilal Oswal says.
Aashish Somaiyaa of Motilal Oswal says January is a good month to invest and advises not to defer investment decisions. He expects index returns of 10-12 percent in 2017.
The coming week is going to be action-packed as Infosys, TCS and IndusInd Bank will kick start December quarter earnings season. Macro data - November factory data and December retail inflation - will also be announced during the week (after market hours on January 12).
Overall October-December is seasonally weak quarter for technology companies due to holiday season and furloughs. Analysts expect it to be muted quarter with tepid revenue growth. Cross currency headwinds and pricing pressure may continue in Q3, though rupee depreciation may help. Outlook for the calendar year 2017 and Infosys' FY17 guidance will be key factors to watch out for.
Infosys will announce its quarterly earnings on January 13, TCS on January 12) and IndusInd Bank on January 10. Other companies like Bajaj Corp, South Indian Bank, Zee Learn, Cyient, Goa Carbon, IL&FS Transportation and Gruh Finance will also come out with earnings.
In the economic data, industrial output for November 2016 and CPI inflation for December 2016 will be declared on Thursday. IIP in October declined 1.9 percent against 0.7 percent growth in previous month while retail inflation fell to 3.63 percent in November from October's 4.2 percent.
On Monday, the market may initially react to lower-than-expected US non-farm payroll data and India's advance GDP data released last Friday evening. According to Central Statistical Organisation, the Indian economy will likely grow at 7.1 percent in 2016-17, 0.5 percentage points lower compared with 7.6 percent expansion in previous year, adding to deceleration fears caused by an economy-wide cash-crunch.
In corporate action, the share price of Sterling Tools will adjust for sub-division (from Rs 10 to Rs 2 on January 9), Stampede Capital for bonus issue (in the ratio of 1:4 on January 10 and Oil India for bonus issue (in the ratio of 1:3 on January 12).Globally, investors will closely watch the US and Chinese data, and news conference by US President-elect Donald Trump (ahead of his formal inauguration on January 20).
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