Market Ahead, January 6: Top factors that could guide markets this week

Geopolitical developments in the Middle East, crude oil prices, and December quarter results will be the major driving factors for the Indian equity indices this week.  

Global markets were thrown into fresh turmoil on Friday after top Iranian commander Qasem Soleimani was killed in a US drone strike in Iraq. The risk of possible retaliation from Iran is expected to keep the crude prices and the Rupee's level volatile which will have a direct bearing on the equity markets.

The earnings season kicks off this week with Infosys announcing its December quarter numbers on Friday and Avenue Supermarts on Saturday.

On the macroeconomic front, PMI data for the services sector for December will be released today and industrial production data for November will be announced on Friday. 

Besides, market participants will also track any news or speculation in the run-up to the Union Budget. Foreign fund flows, stock-specific action, and other global cues will also impact investor sentiment.

In other major developments, the Reserve Bank of India will today carry out its third round of simultaneous purchase and sale of government securities. The central bank would purchase Rs 10,000 crore worth of long-term government bonds and sell an equivalent amount of short-term securities.

Also, the Association of Mutual Funds in India has published its new list of stocks under largecaps, midcaps and smallcaps which could trigger volatility in respective counters.

Globally, Asian stocks declined in Monday's early trade in the wake of escalating Middle East tensions. Japan’s Topix index lost 1.2 per cent and Australia’s ASX 200 Index fell 0.7 per cent. South Korea’s Kospi index also decreased 1 per cent. The early trends in the SGX Nifty were also indicating a subdued start for the domestic indices today.

Back home, the Sensex slipped 110.53 points and the Nifty settled 19 points lower last week. Analysts say that the Nifty is witnessing stiff resistance in the sub-12,250 zones and traders should try to book profit on higher levels keeping close eye on 12,250. However, if Nifty is able to breach 12,150, it may lead to profit booking move up to 12,075.

And, in the end, here's a trading idea for you by CapitalVia which recommends buying Adani Ports above Rs 385.20 for the target of Rs 398 and with stop-loss at Rs 375.