Resurgent Covid to counter Q3 results' positive effect on markets next week

Upcoming Q3FY22 quarterly results season, along with release of macro-economic data points on industrial production and inflation, will determine the trajectory of key domestic equity indices next week.

However, global cues such as high crude oil prices, combined with the direction of foreign fund flows and the rising surge in domestic Covid cases will impact investors' risk-taking appetite.

"A gradual pick up in volumes including from FIIs and DIIs along with stable domestic cues and release of advanced estimates of a rise in FY22 GDP by 9.2 per cent portend well for the near term," said Deepak Jasani, Head of Retail Research, HDFC securities.

"17,944-17,655 could be the range for the Nifty in the near term."

Besides, the Q3FY22 earnings result season will be kicked-off from next week.

As per schedule, IT majors such as Infosys, TCS and Wipro are expected to be the first bluechip firms to come out with their respective Q3FY22 earning results.

Furthermore, other companies like Mindtree, HCL Technologies and HDFC Bank are expected to announce their quarterly results in the coming week.

"Going ahead, next week, an expected strong earnings delivery by the IT sector would hold the key to drive markets," Siddhartha Khemka, Head of Retail Research, Broking and Distribution for Motilal Oswal Financial Services.

"Global cues were positive on hopes of steady recovery as well as return of FIIs will be other major factors for the market."

Furthermore, he said that going ahead, market trend might become volatile in the near term on account of potential risk from Omicron variant, upcoming budget and fragile global cues.

Apart from the Q3FY22 results, investors will look out for the upcoming macro-economic data points such as the IIP (Index of Industrial Production) and Balance of Trade figures.

"The coming week will be driven by the trends in the initial earnings outcome with the IT sector in focus," said Vinod Nair, Head of Research at Geojit Financial Services.

"It is also a busy week in terms of the release of macroeconomic data points like inflation data for December and manufacturing and industrial production data for November."

The Central Statistics Office is slated to release the macro-economic data points of IIP and CPI on January 12.

(Rohit Vaid can be contacted at rohit.v@ians.in)

--IANS

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