The S&P BSE Sensex climbed a new high as it shot past 50,000 and the Nifty50 breached 14,750 in the week gone by but profit-taking towards the close pushed indices in the red.
The Sensex fell 0.3 percent, while the Nifty50 slipped 0.4 percent for the week but it were small and midcaps stocks that took a bigger beating. The S&P BSE midcap index fell 0.7 percent and the smallcap index slipped 1.3 percent for the week ended January 22.
With the Union Budget to be presented on February 1, the market may remain nervous. Here's how top analysts foresee the market for the coming week. Take a look:
Shibani Sircar Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company
From here on, the equity markets will focus on the budget. The policy bias seems to be changing from repair to growth and from survival to revival and this is likely to be the theme of the budget.
Markets could also take cues from the policies of the new US President Joe Biden.
On the COVID front, a successful vaccination drive and fall in the trajectory of active cases will be some other key factors that could determine the market direction.
Nirali Shah, Senior Research Analyst, Samco Securities
Going ahead, the key trigger will certainly revolve around high hopes from the budget, which may set the mood for markets. Quarterly results would propel the volatility in bourses and participants may witness some sector reshuffling.
One should keep an eye on the events unfolding in China, as the authorities have ordered mass testing and enforced a strict lockdown in some parts after a resurgence in cases of the new coronavirus strain.
China is a big player in global trade and any serious impact from the new strain may lead to uncertainty. And, uncertainties do not bode well for markets.
Investors should keep a watch on these major events and refrain from aggressively investing in fresh monies.
The week gone by remained highly volatile, which could continue unless the Nifty breaks below the 14,200-mark, its immediate support in the short-term. A slip can trigger a huge profit-booking move to 13,100 on the downside.
Considering the time period of the up moves, it would be interesting to see that the previous and the current phases coincide, which hints at a bigger correction playing out this time around. Hence, traders should to be light on the long side.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking
For the Nifty, the important support to watch out for would be 14,222, below which the recent bullish structure will get distorted to extend the correction towards 14,000–13,800. On the higher side, 14,500- 14,632 would be seen as immediate hurdles.
Historically, it is rare to see a major trend reversal ahead of any mega event. Hence, it would be interesting to see how things pan out this week ahead of the budget.
The financial space should be watched closely because if further weakness has to come, it will certainly be led by this space.
We advise staying light on positions and should ideally avoid creating leveraged positions ahead of the budget, especially in high beta counters. With a broader view, if any significant correction comes, it would be a great opportunity to accumulate quality propositions in a staggered manner.
Hemant Kanawala, Head-Equity, Kotak Mahindra Life Insurance
The continuing upswing in the market has pushed valuation levels to the highest levels since 2008, with the market trading at a trailing P/B of 4.15 times and P/E of more than 20 on FY22 earnings.
The risk-return equation does not look favourable in the short term and one cannot rule out an interim correction, though the structural support in terms of earnings visibility continues to hold.
Ajit Mishra, VP-Research, Religare Broking
The coming week is a holiday-shortened one and we expect volatility to remain high due to the scheduled derivatives expiry. Besides, budget-related news and global cues will also be in focus.
We have a long list of major corporates who will announce their results during the week. Some of the prominent names are Axis Bank, Kotak Mahindra Bank, L&T, Hindustan Unilever, Maruti, TVS Motor, Tata Motors, Cipla and Sun Pharma.
Markets will first react to the Reliance numbers in early trade on January 25. After two weeks of indecisive movement, we may see further slide ahead and a decisive break of 14,200 level in the Nifty will derail the recent momentum.
In line with the benchmark, we are seeing erratic swings across the board, thanks to prevailing earnings season and we do not expect any relief on that front too. Amid all, it’s prudent to book profit on the rise and focus more on risk management.
Siddhartha Khemka, Head–Retail Research, Motilal Oswal Financial Services
The Nifty formed a Doji candle on the weekly scale, indicating selling pressure at higher zones. Till it the Nifty remains below 14,500, weakness could be seen towards 14,250, while on the upside, key hurdle exists at 14,600-14,750 levels.
Markets may continue to remain highly volatile ahead of the monthly expiry and the budget.
The earnings season has been strong so far and has helped boost sentiments.
The US Fed monetary policy next week would be the first one after Biden's inauguration and would hold a lot more significance.
Overall, the long-term trend of the market is positive and we would advise investors to keep accumulating quality stocks on dips. However, traders are advised to be cautious and book profit intermittently.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.