Market Ahead, January 20: Top factors that could guide markets this week

The week ahead will be dominated by the ongoing corporate results and the countdown to the Union Budget. Investors will first react to earnings of some index heavyweights which were announced post market hours on Friday and throughout the weekend.

TCS reported a muted 0.2 per cent growth in consolidated net profit at Rs 8,118 crore for the third quarter while Reliance Industries posted a 13.5 per cent rise in consolidated net profit to a record Rs 11,640 crore in the October-December period of FY20. For HDFC Bank, Q3 profit jumped 33 percent, but asset quality weakened and provisions spiked.

A total of 26 companies, including Just Dial, KEI Industries, and ICICI Securities, are scheduled to announce their quarterly earnings later in the day.

Besides, the deadline of January 23 for the telecom companies to pay AGR dues of more than Rs 1.47 lakh crore is nearing and hence investors will track any developments on that front.

The Rupee's trajectory, oil price movement, and foreign fund flow will also affect investor sentiment throughout the week.

On the global level, the Bank of Japan is slated to release its interest rate decision on Tuesday while the European Central Bank (ECB) is slated to unveil its policy rate decision on Thursday.

Asian shares neared a 20-month top on Monday. MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.1 per cent, after notching its highest close since June 2018. Japan’s Nikkei added 0.2 per cent to be near its highest in 15 months. Australia’s main index scored another all-time peak and South Korea was near its best level since October 2018. The SGX Nifty was trading higher, indicating a positive start for domestic indices.

In commodities, concerns about a cut in supply from Libya sent oil prices higher and Brent crude futures rose 79 cents to $65.71 a barrel.

Back home, Indian equities closed flat on Friday. The S&P BSE Sensex ended the day at 41,945, up 13 points while the Nifty50 slipped 3 points to 12,352. Going forward, analysts remain upbeat and expect the index to steadily head towards next millstones of 12,400 – 12,500. Traders should play the range and buy as close as possible to supports and sell as close to resistance as possible.

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