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Market may witness high volatility this week amid Budget, PMI data, auto sales numbers

Experts and investors will be watching out for many macro and micro indicators this week like Union Budget, PMI data, Q3 earnings, auto sales numbers. For Nifty, 17,400 may be the crucial resistance, said Rupak De of LKP Securities.

January 31, 2022 / 08:10 AM IST
In the week gone by, market extended profit booking for the second straight losing another 3 percent amid high volatility as investors remained cautious on hawkish US Fed, rising crude oil prices, Russia-Ukraine tensions and persistent FII selling. The BSE Sensex declined 1,836.95 points (3.11 percent) to end at 57,200.23, while the Nifty50 lost 515.2 points (2.92 percent) to close at 17,101.95 levels in the past week.
In the week gone by, market extended profit booking for the second straight losing another 3 percent amid high volatility as investors remained cautious on hawkish US Fed, rising crude oil prices, Russia-Ukraine tensions and persistent FII selling. The BSE Sensex declined 1,836.95 points (3.11 percent) to end at 57,200.23, while the Nifty50 lost 515.2 points (2.92 percent) to close at 17,101.95 levels in the past week.
Ruchit Jain, Lead Research, 5paisa.com | Since the global market event of FED policy and the monthly expiry for our markets is over, the focus would now solely be on the Budget 2022 which is likely to dictate short term trend. Now ahead of this event, our markets have already seen a corrective phase and hence, much of the negativity related to the events already seems to have been factored in. Hence, any positivity hereon could lead to short covering of positions and could lead the markets higher. Thus, the risk reward ratio is favorable for traders to take contra bets and look for buying opportunities here. The immediate supports for Nifty are placed around 16800 followed by the ‘200 DEMA’ level which is at 16600, while on the flipside 17400-17500 is the immediate zone to watch out for in the coming week.
Ruchit Jain, Lead Research, 5paisa.com | Since the global market event of US FED policy and the monthly expiry for our markets is over, the focus would now solely be on the Budget 2022 which is likely to dictate short-term trend. Now ahead of this event, our markets have already seen a corrective phase and hence, much of the negativity related to the events already seems to have been factored in. Hence, any positivity hereon could lead to short covering of positions and could lead the markets higher. Thus, the risk reward ratio is favorable for traders to take contra bets and look for buying opportunities here. The immediate supports for Nifty are placed around 16800 followed by the ‘200 DEMA’ level which is at 16600, while on the flipside 17400-17500 is the immediate zone to watch out for in the coming week.
Vinod Nair, Head of Research at Geojit Financial Services | The domestic trend will be muted in the short-term considering the budget & state elections outcome. In the coming week, the release of PMI data for January will be another key domestic data point that the investors should watch. During this period of high volatility, systematic investment methods should be a better strategy to be followed by investors.
Vinod Nair, Head of Research at Geojit Financial Services | The domestic trend will be muted in the short-term considering the budget & state elections outcome. In the coming week, the release of PMI data for January will be another key domestic data point that the investors should watch. During this period of high volatility, systematic investment methods should be a better strategy to be followed by investors.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | Till the time, the global uncertainty do not disappear, we are likely to have challenging markets where the volatility remains on the higher side. Now the budget is around the corner and hence, we do not expect any decisive move (on either side) on Monday at least. Technically speaking, 16800 is considered to be a crucial level because it coincides with the 78.6% retracement of the recent up move as well as the trend line support. Market has not only managed to hold it in last couple of sessions but also had an excellent recovery to reclaim 17000 with some authority. Hence, as long as this support holds, we remain hopeful for some recovery from hereon. On the flip side, if market manages to recover, we don’t see it surpassing the sturdy wall of 17350 – 17500 before the budget. Whatever breakout has to happen (upwards or downwards), it is now likely to happen on or after the budget only. Till then one should expect a range bound movement and should focus on stock specific action.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | Till the time, the global uncertainty do not disappear, we are likely to have challenging markets where the volatility remains on the higher side. Now the budget is around the corner and hence, we do not expect any decisive move (on either side) on Monday at least. Technically speaking, 16800 is considered to be a crucial level because it coincides with the 78.6% retracement of the recent up move as well as the trend line support. Market has not only managed to hold it in last couple of sessions but also had an excellent recovery to reclaim 17000 with some authority. Hence, as long as this support holds, we remain hopeful for some recovery from hereon. On the flip side, if market manages to recover, we don’t see it surpassing the sturdy wall of 17350 – 17500 before the budget. Whatever breakout has to happen (upwards or downwards), it is now likely to happen on or after the budget only. Till then one should expect a range bound movement and should focus on stock specific action.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Equity markets have been witnessing increase volatility over the last few days. While the US Fed outcome is now behind, several other factors including ongoing result season, Union Budget on Feb 1st and Russia-Ukraine conflicts would keep the market volatility high in coming week as well. Expectations are running high from the government to present a progressive budget which can revive economic growth. However, given the various state election, risk of a populist budget cannot be ruled out completely. Capital Goods, Infra, housing, Real Estate, PSU Banks, etc are some of the sectors that would remain in focus ahead of the budget.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Equity markets have been witnessing increase volatility over the last few days. While the US Fed outcome is now behind, several other factors including ongoing result season, Union Budget on Feb 1st and Russia-Ukraine conflicts would keep the market volatility high in coming week as well. Expectations are running high from the government to present a progressive budget which can revive economic growth. However, given the various state election, risk of a populist budget cannot be ruled out completely. Capital Goods, Infra, housing, Real Estate, PSU Banks, etc are some of the sectors that would remain in focus ahead of the budget.
Yesha Shah, Head of Equity Research, Samco Securities | The Union Budget will be the talk of the town, and market players' reactions to policy announcements may cause whipsaw fluctuations. Furthermore, the automobile industry's monthly sales figures are sure to pique the interest of investors attempting to forecast future trends in auto stocks. With the Q3FY22 results season in full swing, investors may anticipate some stock-specific fluctuations to contribute to the mood in the short term. With a busy week ahead, investors should avoid aggressive wagers and have their money ready to deploy in the scenario of a deeper panic.
Yesha Shah, Head of Equity Research, Samco Securities | The Union Budget will be the talk of the town, and market players' reactions to policy announcements may cause whipsaw fluctuations. Furthermore, the automobile industry's monthly sales figures are sure to pique the interest of investors attempting to forecast future trends in auto stocks. With the Q3FY22 results season in full swing, investors may anticipate some stock-specific fluctuations to contribute to the mood in the short term. With a busy week ahead, investors should avoid aggressive wagers and have their money ready to deploy in the scenario of a deeper panic.
Joseph Thomas, Head of Research, Emkay Wealth Management | The coming week will be influenced to some extent by the expectations from the Union Budget which will be presented on Feb 1, 2022. The outlay on infrastructure, the expansion of the PLI Scheme, the fiscal consolidation path post the pandemic, the specific measures to boost consumption, are some of the things which the market is eagerly waiting for. An aggressive budget alongwith reasonably good earnings performance could counter the pace of the sell-off in the markets to a significant extent.
Joseph Thomas, Head of Research, Emkay Wealth Management | The coming week will be influenced to some extent by the expectations from the Union Budget which will be presented on Feb 1, 2022. The outlay on infrastructure, the expansion of the PLI Scheme, the fiscal consolidation path post the pandemic, the specific measures to boost consumption, are some of the things which the market is eagerly waiting for. An aggressive budget along with reasonably good earnings performance could counter the pace of the sell-off in the markets to a significant extent.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | After a long time, the Nifty closed below the 50-day SMA and has also formed a bearish candle on weekly charts, which is negative for the markets. For the bulls, 17300 would be the important breakout level to watch and if the Nifty manages to close above the same, we could expect continuation of an uptrend wave up to 17450-17550 levels. On the flip side, trading below 17000 may trigger further weakness up to 16800-16700. Also, the Bank Nifty is trading near the 20-day SMA and any movement above the same could see the index rally up to 38500-39000.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | After a long time, the Nifty closed below the 50-day SMA and has also formed a bearish candle on weekly charts, which is negative for the markets. For the bulls, 17300 would be the important breakout level to watch and if the Nifty manages to close above the same, we could expect continuation of an uptrend wave up to 17450-17550 levels. On the flip side, trading below 17000 may trigger further weakness up to 16800-16700. Also, the Bank Nifty is trading near the 20-day SMA and any movement above the same could see the index rally up to 38500-39000.
Ajit Mishra, VP Research, Religare Broking | The coming week is critical, not only for the equity market, but for the economy as a whole. We have the Union Budget scheduled for February 1 and we expect the government to continue with the growth agenda but with a roadmap for fiscal prudence. The coming week marks the beginning of a new month also and auto sales start pouring in from February 1. Besides, we have manufacturing and services PMI data also scheduled during the week. We believe the Union Budget would set the tone for the domestic markets amid the global sell-off. Volatility remains high during the budget week so participants should continue with a cautious stance and prefer hedged positions. We expect the Nifty index to hover in a broader range of 16,600-17,600 and either side decisive break would trigger the next directional move.
Ajit Mishra, VP Research, Religare Broking | The coming week is critical, not only for the equity market, but for the economy as a whole. We have the Union Budget scheduled for February 1 and we expect the government to continue with the growth agenda but with a roadmap for fiscal prudence. The coming week marks the beginning of a new month also and auto sales start pouring in from February 1. Besides, we have manufacturing and services PMI data also scheduled during the week. We believe the Union Budget would set the tone for the domestic markets amid the global sell-off. Volatility remains high during the budget week so participants should continue with a cautious stance and prefer hedged positions. We expect the Nifty index to hover in a broader range of 16,600-17,600 and either side decisive break would trigger the next directional move.
Rupak De, Senior Technical Analyst at LKP Securities | Going forward the volatility is likely to continue; on the higher end, 17400 may remain as crucial resistance. On the lower end, 17050-17000 may act as support for the falling Nifty, below which the index may drift down towards recent swing low of 16836.
Rupak De, Senior Technical Analyst at LKP Securities | Going forward the volatility is likely to continue; on the higher end, 17400 may remain as crucial resistance. On the lower end, 17050-17000 may act as support for the falling Nifty, below which the index may drift down towards recent swing low of 16836.
Santosh Meena, Head of Research, Swastika Investmart | This week is going to be very important and extremely volatile on the back of the Union budget however the good part this time is that the market is heading to the budget on a very light note and there is a high probability of a post-budget rally. A similar trend was visible last year where the market witnessed a pre-budget sell-off and then there was a post-budget rally. Other than the budget, global cues will be very important where global markets are trying to digest rising interest rate scenario but geopolitical uncertainties is another major concern. The rising dollar index and rising crude oil prices are other issues for emerging markets like India. We are in the middle of the Q3 earning session and so far earning session remains good while we have lots of important earnings lined up next week. Technically, Nifty is respecting a very strong demand zone of 16800-16600 where 200-DMA is currently placed at 16640 level however 17400-17800 is a critical supply zone as a cluster of important moving averages while a move above 17800 can lead to a big short-covering rally in the market for a move towards fresh all-time highs. There is a high probability that 16800-16600 has become floor for the Nifty for time being and the market is ready to move higher but if Nifty slips below 16600 level then things can become ugly.
Santosh Meena, Head of Research, Swastika Investmart | This week is going to be very important and extremely volatile on the back of the Union budget however the good part this time is that the market is heading to the budget on a very light note and there is a high probability of a post-budget rally. A similar trend was visible last year where the market witnessed a pre-budget sell-off and then there was a post-budget rally. Other than the budget, global cues will be very important where global markets are trying to digest rising interest rate scenario but geopolitical uncertainties is another major concern. The rising dollar index and rising crude oil prices are other issues for emerging markets like India. We are in the middle of the Q3 earning session and so far earning session remains good while we have lots of important earnings lined up next week. Technically, Nifty is respecting a very strong demand zone of 16800-16600 where 200-DMA is currently placed at 16640 level however 17400-17800 is a critical supply zone as a cluster of important moving averages while a move above 17800 can lead to a big short-covering rally in the market for a move towards fresh all-time highs. There is a high probability that 16800-16600 has become floor for the Nifty for time being and the market is ready to move higher but if Nifty slips below 16600 level then things can become ugly.
Rakesh Patil
first published: Jan 31, 2022 08:10 am
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