Eco­nomic data, earn­ings to drive mar­ket this week

Deccan Chronicle - - Financial -

The stock mar­ket this week would be driven by key eco­nomic data, cor­po­rate earn­ings and global de­vel­op­ments. An­a­lysts ex­pect the mar­ket to re­main volatile given pes­simism over global growth and trade dis­putes. They said re­tail in­fla­tion and whole­sale in­fla­tion num­bers for Jan­uary, due this week, will set the tone for the mar­ket. Re­cently, the RBI cut its repo rate by 25 ba­sis points con­sid­er­ing the be­nign in­fla­tion level. Lower fuel prices eased In­dia's re­tail in­fla­tion in De­cem­ber to 2.19 per cent from the an­nual rate of

2.33 per cent in Novem­ber. The an­nual rate of in­fla­tion, based on monthly Whole­sale Price In­dex, stood at 3.80 per cent for De­cem­ber com­pared to

4.64 per cent for Novem­ber.

“WPI In­fla­tion is ex­pected to re­main sub­dued around

3.70 per cent. The in­dus­trial out­put, which nose­dived to 0.5 per cent pre­vi­ously, is ex­pected to come with im­proved num­bers and any dis­ap­point­ment can give a jolt to the mar­ket,” said Mustafa Nadeem, CEO, Epic Re­search.

A key data closely watched by in­vestors is the In­dex In­dus­trial Pro­duc­tion (IIP) for De­cem­ber, which will be re­leased on Tues­day. A dis­mal IIP data for the past two con­sec­u­tive months had caused ner­vous­ness in the mar­ket. “A fall in in­ter­est rates and im­prov­ing out­look for con­sump­tion-ori­ented sec­tors af­ter the in­terim bud­get will pro­vide sup­port to the mar­ket,” Vinod Nair, head of re­search, Geojit Fi­nan­cial Ser­vices, said. “On the global front, pes­simism over growth and trade dis­putes may lead to volatil­ity,” he added.

Earn­ings num­bers from com­pa­nies like Coal In­dia, Hin­dalco, Eicher Mo­tors, ONGC and Sun Pharma will be closely watched by the mar­ket. of Ac­cord­ing to tech­ni­cal an­a­lysts, Fri­day's losses in­di­cated a down­side mo­men­tum for Nifty on tech­ni­cal charts. “Nifty forms a shoot­ing star as false break­out traps the bulls on the up­side and ended down with mar­ginal gains. A shoot­ing star is a re­ver­sal pat­tern which is char­ac­terised as a small body with an up­per shadow twice the range of the body that in­di­cates weak­ness at higher lev­els and a pos­si­ble im­pend­ing re­ver­sal,” said Nadeem of Epic Re­search.

“A Doji star fol­lowed by a fall­ing win­dow on a daily scale has se­ri­ously put some dent on the charged bulls,” he fur­ther said. De­riv­a­tives data, which saw a huge change on the RBI event, has turned up­side down and has hinted a cau­tious stance for any trader seek­ing a di­rec­tional move. Short built-up is seen on higher strikes of 11,100-11,200, mak­ing it a re­sis­tance too hard to break in Fe­bru­ary series while lower strikes have seen some long build-up. This is a clas­sic trap for the bulls. It is very much not a trend­ing mar­ket as it has been os­cil­lat­ing in a very short range be­tween 10,600 and 11,000.

Tech­ni­cal View

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