Earnings, macroeconomic data, global cues, COVID may keep market choppy: Experts

The coming week will be driven by the trends in the initial earnings outcome with the IT sector in focus. It will also be a busy week in terms of the release of macroeconomic data points like Inflation data for December and manufacturing and industrial production data for November, said Vinod Nair, Head of Research at Geojit Financial Services

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Indian market kicked start the year 2022 on a robust note with 2 percent gain supported by banking and oil and gas stocks, despite rising concern over the COVID infections and a Hawkish FOMC stance. The BSE Sensex last week added 1,490.83 points (2.55 percent) to end at 59,744.65, while the Nifty50 gained 458.65 points (2.6 percent) to close at 17,812.70 levels.

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Palak Kothari, Research Associate at Choice Broking | At present, the index has support at 17,500 levels while resistance comes at 18,000 levels, crossing above the same can show 18,200-18,300 levels. On the other hand, Bank Nifty has support at 36,800 levels while resistance at 38,300 levels.

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Mohit Nigam, Head - PMS, Hem Securities | On the technical front, Nifty's immediate support and resistance can be at 17,500 and 18,000, respectively. While for Bank Nifty, 37,000 and 38,200 may act as immediate support and resistance.

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Yesha Shah, Head of Equity Research, Samco Securities | The Q3FY22 earnings season will commence with large-cap IT companies reporting first. In recent weeks, IT stocks in India have outpaced the benchmark, fuelled by expectations of an increase in deals and a resultant stellar growth momentum. The sector's major monitorables will be margin projection, revenue guidance, and attrition figures. On the macroeconomic front, investors will be keeping a close eye on the domestic inflation rate, as well as inflation numbers for the United States and China. In contrast to other central banks, as RBI appeared confident of containing inflation in India, a higher-than-expected inflation would point to a policy rate hike sooner than planned, which can cause jitters in the market.

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Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | For the last couple of sessions, the index is consolidating near this key Fibonacci level. The hourly Bollinger Bands have become flat thus suggesting that the consolidation can continue for some more time. The overall structure shows that this is a healthy consolidation, which will prepare the setup for the next up move. So for the next few sessions, sideways action can take place in the range of 17,650 – 18,000. On the downside, 17,650-17,600 will provide cushion for any minor degree dip whereas on the higher side, 18,000 mark is expected to keep the rise in check for the short term.

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Ajit Mishra, VP - Research, Religare Broking | Markets are likely to consolidate further after the recent surge and it would be healthy. Meanwhile, volatility is likely to remain high, citing mixed global cues and COVID-related updates. Besides, upcoming macroeconomic data (IIP, CPI, and WPI) and the beginning of the earnings season could further add to the choppiness. We recommend continuing with a positive yet cautious approach and preferring hedged positions.

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Vinod Nair, Head of Research at Geojit Financial Services | The coming week will be driven by the trends in the initial earnings outcome with the IT sector in focus. It is also a busy week in terms of the release of macroeconomic data points like inflation data for December and manufacturing and industrial production data for November.

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Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | As we step into CY22, the focus of central bankers across the world has shifted towards inflation and monetary policy normalisation after the pandemic given the context of US Fed tapering and potential hardening of interest rates in CY22. The third COVID wave has once again resulted in imposition of some state-level restrictions. While this wave, so far, seems less severe in terms of mortality and hospitalisation, one needs to watch out for the trend and reactions of both the state and central governments in the next few weeks. While the market trend might be volatile in the near term on account of potential risk from the Omicron variant, the upcoming budget and fragile global cues, in the long run, strong earnings delivery along with positive macro-economic data would hold the key to drive markets. We remain optimistic and expect Nifty to deliver around 12-15 percent returns in 2022, supported by continuation of economic recovery and strong earnings growth.

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Ruchit Jain, Lead Research, 5paisa.com | In the coming week, we could see Nifty testing 18,000-18,050, which would be the immediate short-term hurdle to watch for. In the options segment, we saw 18,000 call option attracting option writers interest and hence, it could be a crucial level to watch out for in the coming week. On the flipside, 17,650 and 17,500 are immediate support levels and any intermediate corrections towards the supports should be construed as a buying opportunity. The banking space has shown immense strength which is likely to continue given that this sector has started an uptrend after its long underperformance. In the coming week, the results from the IT giants are also likely to dictate the near term direction. Now the IT sector has seen a run-up ahead of the result season and there could be some profit booking around the outcome of the event (results). However, in case there’s any such correction in the IT space, then too it is unlikely to have a major impact on Nifty as it will be balanced out by strength in Bank Nifty which has a decent weightage in the benchmark.