In the coming week, market participants will be eyeing the Wholesale Price Index (WPI) data for the month of December to be released on January 16. The annual wholesale price inflation rate in India declined to 5.85 per cent in November 2022 from 8.39 per cent in the prior month. Further, the Society of Indian Automobile Manufacturers (SIAM) will come out with the Passenger Vehicles Sales data on January 17. Traders will also be looking for Foreign Exchange Reserves data scheduled to be released on January 20.
Key Q3 results
Earnings will be in focus next week too, and traders will be watching some important results announcements during next week, Indusind Bank on January 18; Hindustan Unilever, Asian Paints on January 19; Union Bank of India, JSW Steel, Bandhan Bank, HDFC Life Insurance Company on January 20; Yes Bank, Ultratech Cement, SBI Life Insurance Company, Kotak Mahindra Bank and ICICI Bank on January 21.
Market watcher Deepak Jasani, Head of Retail Research at HDFC Securities said: “Global stocks were largely up and at multi month highs on the prospect of a less hawkish Federal Reserve this year after data showed US consumer inflation eased as expected in December. Stronger than expected GDP growth for November from UK also helped. China’s exports fell further in December as global demand continued to drop off, adding to pressure on the economy as it charts a hasty, uncertain path out of Covid Zero.”
“Nifty once again took support from 17,774, raising the importance of that level. Despite relentless selling by FPIs, Nifty has been able to remain stable in a wide band, helped by local flows. On a weekly basis, Nifty rose 0.54% after a negative week. Nifty seems headed towards 18,127-18,256 band over the next few sessions provided the 17,774 level is protected,” Jasani added.
Major triggers for US Market
On the global front, the coming week will be shortened by holiday as the US markets will remain close on January 16 on account of Martin Luther King, Jr. Day. On the economic data front, investors will be eyeing NY Empire State Manufacturing Index on January 17, followed by Producer Price Index, Retail Sales, Redbook, Industrial Production, on January 18; API crude oil stock change, Building Permits, Initial Jobless Claims, EIA crude oil stocks January 19; Existing Home Sales, Baker Hughes oil rig count on January 20.
FII investment trend
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “An important trend in the market this month is the sustained selling by FIIs. FIIs sold for the 16th straight trading session taking the total sell figure to Rs 23,887 crore. FIIs are selling in India and moving money to cheaper markets like China, Hong Kong and South Korea where valuations are much lower. In 2022 FIIs were selling in China.”
“This trend has changed to long China and short India. This trend may continue for a few more days. Since DIIs and retail investors are buyers and are keen to buy the dips, the FII selling is unlikely to lead to a sharp correction in the market even though the market appears weak for the near-term. CPI inflation falling to 5.72% in December and IIP spurting to 7.1% in November are positive macros which can provide fundamental support to the bulls,” he added.
Technical Outlook for next week
Rupak De, Senior Technical Analyst at LKP Securities, said: ” On the weekly chart, the index has formed a doji-like pattern, which signifies indecision. However, the Nifty sustained below the 50 EMA on the daily timeframe, confirming an ongoing bearish trend. The resistance is visible at 18,300, whereas on the lower end, support is visible at 17,800. Any breakout in either direction would create a directional trend in the market”.
Also Read: Nifty Bank Outlook: Stay cautious till 43,000 is taken out; ICICI Bank, IndusInd, Canara Bank to do well