India's equity markets may react to the fine-print of the Union Budget 2020 after Saturday's immediate reaction, but the focus will largely shift to quarterly earnings and rapidly spreading coronavirus. Participants will also keenly watch other developments like RBI policy and the release of key macro data.
On the corporate earnings front, Bharti Airtel, Lupin, Sun Pharma, and Mahindra & Mahindra are among the major companies scheduled to declare their October-December results this week.
The Reserve Bank will announce its first bi-monthly monetary policy post-Budget on Thursday. While experts aren't pinning any hope on the rate cut front this time, largely due to high inflation, the RBI's commentary on inflation and growth forecast would still be keenly watched. On the macro data front, Markit Manufacturing PMI data for January will be released today and Services PMI numbers on Wednesday.
Besides, foreign fund flow, the Rupee's trajectory and oil price movement will also impact sentiments.
On the global front, concerns related to coronavirus will dictate sentiments. A total of 350 people have died in China from the new virus with the first death out of the mainland reported on Sunday in the Philippines. Trading resumed in China following the Lunar New Year break. In order to minimise any panic, China’s central bank plans to inject 1.2 trillion yuan of liquidity into the markets via reverse repo operations today. Moreover, a Reuters report said that China Securities Regulatory Commission has issued a verbal directive to brokerages to bar their clients from selling borrowed stocks today. Despite these measures, stocks in Shanghai fell up to 8.7 per cent at the opening. Australia’s benchmark index opened in the red to be down 0.7 per cent while New Zealand shares faltered 1.8 per cent.The SGX Nifty was trading around Nifty's Saturday closing level.
In commodities, oil futures were down on worries about a slowdown in demand with Brent crude sliding 39 cents to $56.24 a barrel, the lowest since January 2019.
Giving a thumbs down to the Budget, the market benchmark Sensex logged its biggest single-day plunge in nearly five years on Saturday. Investors were disappointed as the Budget failed to live up to market expectations of growth-boosting measures. According to analysts, the Nifty is witnessing strong resistance in the sub-11,800 zones. They say that the Nifty should hold 11,650, otherwise, it can see level of 11,500 in this week. Traders should try to book profits at higher levels keeping close eye on 11,800. However, if Nifty trades below 11,600, then we can see downside movement to 11,500.
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