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

In overnight trade, Wall Street closed higher as U.S. Treasury Secretary nominee Janet Yellen advocated for a hefty fiscal relief package before lawmakers to help the world’s largest economy ride out a pandemic-driven slump. Former Fed chair said the benefits of a big stimulus package are greater than the expenses of a higher debt burden.
 

President-elect Joe Biden, who will be sworn into office later today, last week laid out a $1.9 trillion stimulus package proposal to boost the economy and speed up the distribution of vaccines.

The Dow Jones Industrial Average rose 0.38 per cent, while the S&P 500 gained 0.81 per cent. The tech-heavy Nasdaq Composite added 1.53 per cent.

However, the Asian markets were unable to mirror the sentiment entirely and were trading mixed.  Investors assessed comments suggesting a tough line from Joe Biden’s incoming administration toward China. South Korea’s Kospi climbed 1.2 per cent and Australia’s S&P/ASX 200 Index advanced 0.6 per cent. However, Japan’s Topix index dipped 0.2 per cent.

Meanwhile, Brent futures extended gains on Wednesday to top $56 barrel. On Tuesday, Brent oil rose past $55 a barrel — with some assistance from a weaker dollar — even as the International Energy Agency cut its demand outlook for the rest of the year.

Consequently, tracking mixed cues from Asian peers and high crude oil prices, SGX Nifty futures traded 70 points lower at 14,486, indicating a comeback by the bears. That apart, Q3 earnings will continue to influence the market moves.

In other news, investment through participatory notes (P-notes) in the domestic capital market rose to a 31-month high of Rs 87,132 crore at December-end, reflecting the bullish stance of FPIs.

Now, a look at the stock-specific developments that are likely to sway the market today:

Bajaj Finance, Bajaj Finserv, HDFC AMC, Havells India, Federal Bank and L&T Technology Services are among 36 companies set to post their December quarter numbers today.

The government will sell its entire 26.12 per cent stake in Tata Communications, erstwhile VSNL, through an offer for sale and strategic sale route in the current fiscal. Meanwhile, Tata Communications posted over a five-fold jump in consolidated net profit at Rs 309.41 crore for the December 2020 quarter.

Garden Reach Shipbuilders will conduct a roadshow on January 20-21 as the government looks to divest stake in the firm via offer for sale (OFS).

Larsen & Toubro Infotech on Tuesday reported a 37.85 per cent jump in net profit to Rs 519.3 crore for the December quarter, mainly driven by a surge in revenue and margin expansion.

A meeting of Board of Directors of Indian Bank is scheduled on January 22 to consider a proposal for raising of fund/equity capital.

In an update on the primary market, the initial public offer of Indian Railway Finance Corporation was subscribed 1.22 times on the second day of subscription on Tuesday. The category reserved for non-institutional investors was subscribed 24 per cent and retail individual investors (RIIs) 2.33 times.

Another IPO by Indigo Paints is all set to open for subscription today. The price band for the issue has fixed at Rs 1,488-1,490 per share. Most analysts have a subscribe rating on the issue, however, some are concerned about its valuations. The company on Tuesday mopped up Rs 348 crore from anchor investors ahead of its initial share-sale.