Market Ahead, January 4: Top factors that could guide markets this week

The week gone by was another spectacular one for the benchmark equity indices as they scaled back-to-back record highs with Nifty crossing the 14,000 mark for the first time. The BSE Sensex rose 1.19 per cent for the week to 47,868.98 while Nifty added 1.95 per cent to settle at 14,108.50.

This week will be action-packed with a host of events lined up both on the domestic and global front.

But first and foremost what could enthuse the market bulls is approval by Indian drug regulator DGCI to Covid vaccines produced by AstraZeneca and Bharat Biotech for emergency use in the country. India is expected to start a massive immunisation programme within about a week. 

Besides this, DGCI also approved phase 3 clinical trials of Ahmedabad-based Cadila Healthcare’s ZyCov-D, paving the way for a timely roll-out of another indigenous Covid-19 vaccine.

That apart macro data, Georgia elections and Q3 earnings are likely to sway the market mood this week.

On the economic front, traders would eye the Markit Manufacturing PMI for December scheduled to be released later today and Markit Services PMI that would be out on January 6.

Investors are cautiously watching runoff elections in Georgia for two US Senate seats on Tuesday that will determine which party controls the Senate.

Minutes of the Federal Reserve’s December meeting are due on Wednesday and should offer more detail on discussions about making their forward policy guidance more explicit. While the US unemployment report for December is due Friday.

Back home, IT major TCS will kick off the Q3 earnings season with its results slated to be released on Friday, January 8.

Traders will also eye movement in global markets, crude, rupee and FII flows.

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

Asian share markets got the new year off to a solid start on expectations central banks will keep money super cheap while the rollout of coronavirus vaccines helps slowly revive the global economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1%, a whisker from a record high. Japan’s Nikkei rose 0.4% to reach peaks not seen since August 1990 while E-Mini futures for the S&P 500 were flat after touching a new all-time high in early trade.

Mirroring the mood in Asian markets, SGX Nifty was up 0.63% at 14,105, indicating a strong start for the domestic indices back home.

On the stock specific front, shares of BEML will be in focus as the government has invited initial bids from private firms for a 26% stake in state-owned defence and engineering company.

Adani Green Energy received letter of award for 600 MW wind-solar hybrid power project.

Sebi penalised Reliance Industries and its chairman and managing director Mukesh Ambani as well as two other entities for their alleged role in carrying out manipulative trades in Reliance Petroleum in 2007.