Market Ahead, January 11: Top factors that could guide markets this week

The benchmark equity indices extended their record-breaking bull run in the past week, hitting all-time highs on almost all days. In the last five trading sessions, BSE Sensex and NSE Nifty added almost 2 per cent each.

This week markets are likely to take cues from Q3 earnings, a host of macroeconomic data and global trends. Meanwhile, progress on the coronavirus vaccine front, which India is looking to roll out from January 16, and a bigger stimulus in the US would also be in focus.

When markets open for trading today, they will react to the Q3 numbers reported by IT major Tata Consultancy Services whose profit jumped 7% YoY in the December quarter to Rs 8,701 crore. Shares of Avenue Supermarts are likely to be in focus too as the firm posted a 16% jump in profit.

That apart, a number of companies are also slated to release their Q3 numbers this week, including Infosys, Wipro, HCL Tech, HDFC Bank, Filatex India, Tata Elxsi, L&T Finance Holdings, PVR and Karnataka Bank to name a few.

Besides this, market participants will eye the macroeconomic data such as the Industrial Production and Manufacturing Production data for the month of November, along with CPI inflation for December that are scheduled to be released on January 12, while WPI inflation for December is slated on January 14.

According to a Reuters poll, India’s retail inflation likely fell sharply in December, landing within the Reserve Bank of India’s target range, due to a significant drop in vegetable and food prices. Meanwhile, there are expectations that industrial production likely expanded for the second month in a row after six months of contraction.

Any development on the global front too will sway the market sentiment back home. US President-elect Joe Biden last Friday said he will deliver a coronavirus relief plan costing “trillions” of dollars next week and the markets will likely react to that, and also to the US jobless claims due on Thursday.

Lastly, movement in crude oil prices and rupee, along with inflows from FIIs would be of keen interest for the markets.

And now, let's take a look at the trade setup for today

Tracking a strong finish for Wall Street in overnight trade on Friday, Indian markets are set to kick off the week on an upbeat note, hitting yet another record high at the open. SGX Nifty futures were trading 72 points up at 14,448.

However, tepid cues from Asian peers are likely to limit gains for benchmark Sensex and Nifty. Asian shares took a breather as “trillions” in new US fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade. S&P 500 futures slid 0.5%, Australia’s S&P/ASX 200 index fell 0.6% while South Korea’s Kospi index advanced 2.7%.

On the stock-specific front, shares of TCS and Avenue Supermarts will be in focus after reporting strong Q3 numbers.

Drug major Cipla is recalling over 5.8 lakh packets of a drug for the reduction in the occurrence of gastric ulcers from the US market, as per a report by the US Food and Drug Administration.

Tata Steel's total output from India operations rose 3% to 4.60 million tonnes (MT) during the October-December quarter of the current financial year.

Bharti Airtel announced the appointment of Pradipt Kapoor as its Chief Information Officer (CIO).