Market one week ahead: Nifty could rise to 18,300.Third Quarter Earnings, Key Factors Inflation Data

On Friday, Sensex closed 452.90 points (0.75%) lower at 59,900.37 and the Nifty 50 closed 132.70 points (0.74%) lower at 17,859.45.

After trading strong on January 2-3, the Indian market fell into the red for three consecutive days from January 4-6. Over the past three trading sessions, Sensex has dropped his 1,394 points, while the Nifty 50 has fallen more than 373 points. From January 4th to 6th, the market capitalization of BSE-listed companies plummeted. ¥Settled at $4.929328 billion ¥27.975 billion rupees.

Foreign portfolio investors were generally net sellers across market products. FPI withdrew between January 2nd and 6th, according to NSE data ¥Rs 587.2bn from shares, on sale ¥1.24 billion rupees from debt, ¥$760 million from debt VRR, and ¥$3.6 billion in the hybrid market.

Also, foreign institutional investors (FII) continued to sell throughout the week. From January 2nd to 6th, the FII withdrew ¥Rs 781.344 billion from Indian stocks.

Meanwhile, the rupee ended the week largely unchanged compared to the American currency. The rupee fell against the US dollar on Friday, closing at 82.72. That’s as the Greenback hit near his one-month high after strong US data stoked hopes for a more hawkish approach by the US Federal Reserve on monetary policy.

Commenting on the weekly results from January 2 to 6, Vinod Nair, Head of Research at Geojit Financial Services said: FOMC minutes reveal that Fed officials are determined to keep inflation in check by maintaining an aggressive stance. ”

He added, “Equity market trends are starting to be affected in anticipation of this view, heavy economic data, Fed policy, India’s third quarter results, and federal budget expectations.” Volume growth has slowed, providing a glimpse of the decline in long-established demand.Oil prices plunged on fears of a global recession.IT and banking sectors profitable. It was unstable in anticipation of a downturn in

The factors driving the market in the week from January 9th to 13th are:

According to Nair, investors will focus on a calmer earnings season in the third quarter, along with the release of key macroeconomic data such as inflation. The market is expected to maintain his cautious trend for a month.

Ajit Mishra, vice president of technical research at Religare Broking, highlighted a key factor, saying next week marks the start of earnings season, and so will IT majors. TCS, Infosys, HCL Tech, and Wipro will release numbers later that week. Besides, banking heavyweight HDFC Bank will also announce its results along with several other banks. On the macroeconomic side, the IIP and CPI inflation rates will be released on his January 12th.

TCS, which is backed by Tata Group, India’s largest IT company in terms of market share, kicks off its December 2022 quarterly season by reporting its quarterly results on 9 January. Others like Infosys and HCL Tech will also announce their third quarter on January 12th, followed by Wipro on January 13th. HDFC Bank, the largest bank by market share and also the largest private banker, will release its third quarter results on January 14. Others will follow suit.

Regarding the IT sector’s third quarter results, Apurva Sheth, Head of Market Perspectives at Samco Securities, said that domestically, the third quarter of 2023 results season is expected to continue as major IT companies report their quarterly figures. I said it starts with The turnover rate of IT companies, which peaked in Q2, is attracting attention. As stock-specific movements become more pronounced and investors react to earnings failures and crashes, it’s time to evaluate a company’s long-term potential rather than basing investment decisions solely on quarterly results. It is recommended.

Meanwhile, Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, said the IT industry is expected to face tough times in the first half of 2023.

Furthermore, Mishra added that aside from domestic factors, global market performance remains on participants’ radars.

Market participants will also keep an eye on US and Chinese inflation rates.

However, Religare Broking experts believe volatility will remain high across the sector as the earnings season begins. With this scenario in mind, he recommends preferring a hedged approach and avoiding overtrading.

Where is Nifty going?

ICICI Direct expects Nifty to delay consolidation at 17800-18300 by a week ahead of the start of quarterly earnings with the IT firm amid stock-specific moves. In a note, the broker said a decisive close above 18300 would lead to a resumption of the directional uptrend.

According to ICICI Direct memos, Nifty has retreated 50% from a 9-week rally over 5 weeks, showing a slow pace of retreat and inherent strength. Also, 17500 is the confluence of his 200-day EMA, which equates to the September-October decline, which makes the index a strong support.

He noted that India’s VIX index was flat on the weekly timeframe despite revisions to the headline index indicating participants were unaware of major risks.

Rohan Patil, Technical Analyst at Samco Securities, observes a wider timeframe (weekly chart) and the front-line indices are trading between the 9 & 21 EMAs at the 18,070 & 17,826 levels. . For the last three weeks the bears have been trying to break below the 17,800 level while the 21 EMA is acting as an anchor support for the index.

With that said Patil, “The volatility is likely to continue in the short term, with major weaknesses. At the low end we see support at the 17,750 level and at the high end we see resistance at the 18,250 level, which A bullish reversal is likely when crossed.”

buy stocks?

ICICI Direct expects the BFSI, PSU, IT and infrastructure sectors to be the focus during continued consolidation. The large cap stocks favored by brokers are Reliance Industries, SBI, HDFC Life, L&T, Ultratech Cement, NTPC, Tata Steel/Hindalco and Maruti Suzuki. Its preferred mid-cap stocks are — PFC, IDFC First Bank, PNB, KEC, NCC, IOC, GPPL, National Aluminum, Mahindra CIE, and Nelcast.

Disclaimer: The views and recommendations above are those of the individual analyst or brokerage firm and not those of Mint. Investors are advised to check with a certified professional before making any investment decision.