Markets likely to remain volatile this week, all eyes on macro data
Mumbai: The Indian markets are expected to remain volatile in this truncated week, while investors will watch global markets movements. Selloff in global markets last week, mainly due to rising bond yield in the US markets, jittered investor sentiments across regions. Stock markets in India are closed on Tuesday on account of Mahashivratri.
The markets may also react to the decision that Indian bourses will not provide data feeds to overseas exchanges. In a joint statement on late Friday, National Stock Exchange of India Ltd, BSE Ltd and Metropolitan Stock Exchange Ltd said that any existing licensing agreements with overseas exchanges will be terminated which will effectively mean SGX Nifty futures contract will not exist, after a six-month notice period which expires in August.
According to a Mint report, Singapore Stock Exchange (SGX) on Sunday said it will develop new products to provide investors with access to Indian securities after exchanges in the country abruptly decided to end licensing their products and data to overseas bourses.
Shifting focus to corporate developments, Sun Pharma, GAIL, Bank of India, Indian Bank, Tata Power, Jet Airways, Dena Bank and Allahabad Bank are few companies which will declare their December earnings this week.
Vinod Nair, head of research at Geojit Financial Services, said the current earnings season is showing strong signs of revival in corporate earnings, underlining long-term growth prospects, which is providing relief for investors. “However, the prevailing inflationary pressure and fiscal slippage may turn the Reserve Bank of India (RBI) to a more hawkish stance in the near future. Considering this, the near-term profitability of domestic corporates might get impacted by higher inflation and interest cost. Further, the volatility in global market is spooking investor sentiments given the premium valuation,” he added.
Stocks like State Bank of India, Coal India and Bank of Baroda will be also watched after they announced December quarter results last week after market hours. Coal India reported a 4.21% increase in its consolidated net profit at Rs3,004.79 crore for the quarter ended December 2017. SBI reported a net loss of Rs2,416 crore for the fiscal third quarter from a net profit of Rs1,582 crore in the July-September quarter. In the third quarter, SBI made a loan loss provision of Rs17,760 crore, as compared with Rs9,662 crore a year ago.
Nagaraj Shetti, technical research analyst, HDFC Securities, said there is a possibility of a minor halt in downside momentum or an attempt of minor upside bounce from near 10,350-10,400 levels, but eventually this support could be broken on the downside over the next couple of weeks. “Any attempt of upside bounce is going to be a sell on rise opportunity for next week and the downside target to be watched is around 10,000 mark for the next couple of weeks,” he said.
Meanwhile, industrial output data for December, both Consumer Price Index or retail inflation and wholesale price index (WPI)-based inflation for January will be released this week.
Industrial and manufacturing production data for December, and CPI inflation for January will be released on Monday, while WPI inflation for January will be announced on Wednesday. Factory output growth leapt to a 17-month high in November, while WPI inflation slowed to 3.58% in December, but CPI accelerated to a 17-month high of 5.21% in the same month.
In the primary markets, initial public offering (IPO) of Aster DM Healthcare will open for subscription on Monday. The company, which runs hospitals in India and the Middle East has set a price band for the offer at Rs180-190 per share. The share sale will close on 15 February. It aims to raise Rs294 crore through the IPO.