Sensex, Nifty: Budget 2023, US Fed meeting among key factors that may influence Dalal Street this week
The Union Budget 2023, to be presented on February 1, will keep the markets buzzing throughout this week and there will be sector-specific moves based on the budget announcements by Finance Minister Nirmala Sitharaman. Parliament’s Budget session will begin on January 31 and Finance Minister Sitharaman will present the Budget in the Lok Sabha on February 1 (Wednesday).
Also read: These 90 BSE 500 stocks defied gravity to rally up to 11% last week; what lies ahead
The week will also mark the start of the new month and lots of economic data will be released along with the auto sales numbers which will show the actual state of the auto sector. Core sector data will also be announced for the month of December. S&P Global Manufacturing PMI, too, will be released on February 1. Also, market participants will be eyeing S&P Global Services PMI on February 3. On the same day, data on India’s foreign exchange reserves will also be released.
Key Q3 results
This week, some major companies will release their quarterly results. Among the firms that will put out their results are Bajaj Finserv, Tech Mahindra, BPCL, Larsen & Toubro, Sun Pharmaceutical Industries, Coal India, UPL, Power Grid Corporation of India Britannia Industries, HDFC, Tata Consumer Products, Titan, ITC and Divi’s Laboratories.
Major triggers for US Market
On the global front, the US Federal Reserve, the central bank of America, will announce its policy rate. Fed Chair Jerome Powell has stated that the central bank’s battle against decades-high inflation is far from over. Many market experts believe that the central bank will hike the Fed funds target rate by another 25 basis points in the policy meeting. However, a rate hike higher than expected could impact the market negatively. Apart from the rate decision, traders will also be eyeing Dallas Fed Manufacturing Index on January 30, followed by Redbook and House Price Index on January 31, API Crude Oil Stock Change, ISM Manufacturing PMI, EIA Crude Oil Stocks Change on February 1, initial jobless claims, factory orders on February 2, and the unemployment rate on February 3.
Market watcher Vinod Nair, Head of Research at Geojit Financial services, said, “Despite the optimistic result announced by the blue chips, this week’s market sentiment suddenly got dampened by the unfavourable research report on Asia’s richest promoter Group companies. The same is obnoxiously affecting banking stocks (BSE Bank down by >5%), despite its positive results owing to high group lending; with PSU banks being the most impacted due to high exposure. The market appeared to be uneasy ahead of the upcoming Union Budget and Fed meeting, and FII were selling as funds are being shifted to other EMs because of attractive valuations.”
“The Union Budget and FOMC are scheduled for release on February 1st, and the market will take cues from the outcomes next week. Any increase in funding towards capital expenditure and rural areas within the constraints of the fiscal deficit controls will be favourable, while any unfavourable proposals, such as an increase in LTCG rates/duration or populist measures due to the pre-election budget, could add to the bearish mood in the short-term. According to the most recent survey, the FOMC is expected to raise rates by 50 basis points at the upcoming meeting, and any decrease from this level will be considered positive. The recent trend of an uptick in crude prices due to a rebound in demand from China may add pressure to the domestic market in the near term.” he added.
Rupak De, a Senior Technical Analyst at LKP Securities, said “The index has fallen below recent consolidation on the daily chart, leading to a big sell-off from the foreign institutions. However, the 50-week exponential moving average, located at 17400, will likely provide immediate support. A further correction may be seen if the index falls below 17400. On the other hand, resistance is visible at 17850. As long as the Nifty remains below 17850, traders may favour a sell-on-rise strategy.”
