next Dalal Street week The top ten things that keep traders active include earnings, services, and RBI policy

next Dalal Street week The top ten things that keep traders active include earnings, services, and RBI policy

next Dalal Street week The top ten things that keep traders active include earnings, services, and RBI policy

The market may experience some strength after the recent surge and caution ahead of the RBI policy in the next week, according to experts, but generally, the attitude is in favor of bullishness given the strong global indications. It is apparent.

Next week, all eyes will be on corporate results and RBI policy.

Due to the reduction in the fiscal deficit goal for FY20 and the emphasis on capital investment rather than populism, particularly in the interim budget ahead of general elections, markets reached a fresh high on the Nifty 50 during the budget week that concluded on February 2. Positive worldwide signals increased sentiment as well. Notwithstanding, the benchmark indexes concluded at all-time highs, driven by a bounce in Bank Nifty, as traders became wary ahead of SBI's weekend results and the RBI's monetary policy the following week.

The State Bank of India and Tata Motors' quarterly reports are expected to cause the market to react first on February 5. Tata Motors reported a 138% increase in profit on good operational results, above analysts' projections, whereas SBI reported a 35% year-over-year decrease in net profit owing to unusual losses.

Despite caution ahead of the RBI policy and some strength after the recent gain, general mood seems to be optimistic given the favorable global indications, and stock-specific actions will persist. According to analysts, for continuing corporate profitability.

The BSE Sensex increased 1,385 points, or 1.96 percent, to 72,086 over the week, while the Nifty 50 gained 501 points, or 2.35 percent, to 21,854; advances were seen in most sectors, with the exception of FMCG. The Nifty Midcap 100 and Smallcap 100 indexes saw increases of 2.7% and 5.6%, respectively, outpacing the leaders.

"The focus will be on earnings and the RBI meeting for signals," according to Religare Broking's Ajit Mishra, after the US FOMC meeting and interim budget had concluded. US markets will maintain their upward trend on a global scale. False.

As long as attitudes are good and there have been impressive budgetary deliverables, Siddharth Khemka, head of retail research at Motilal Oswal Financial Services, anticipates that the market will continue to move in the right direction.

All of the major industries are contributing, in Ajit's opinion, but stability in the banking industry is necessary for long-term success.

Here are some important things to consider:

RBI guidelines

Experts predicted that the Monetary Policy Committee will maintain the benchmark interest rate at 6.5% while adopting a less aggressive stance. Nevertheless, the committee's comments will be closely scrutinized for clues about the start of the rate-cut cycle and the direction of GDP and inflation.

"We anticipate the Committee to retain the monetary policy stance despite the liquidity constrained environment, pointing to the "need to withdraw," said Rahul Bajoria, MD and Head of EM Asia (ex-China). However, communication will probably be less intrusive," the Barclays economist said. He believes that a rate reduction may occur in Q1 of FY24–25.

corporate profits

The earnings season for the October–December quarter, which has been rather uneven so far, is almost done. In the next week, 1,200 businesses—including well-known brands like Bharti Airtel, Britannia, Nestle India, Power Grid Corporation, Tata Consumer Products, Grasim Industries, Hero MotoCorp, Divis Laboratories, and ONGC—will unveil their quarterly financial scorecards.

Next week, the following companies will also be releasing quarterly data: Life Insurance Corporation, Lupine, FSN E-Commerce Ventures (Nyaka), Zomato, Honasa Consumer, Tata Power, Alembic Pharma, Ashok Leyland, Varun Beverages, Godrej Properties, Apollo Tyres, Manappuram Finance, Apollo Hospitals Enterprise, Biocon, Escorts Kubota, Patanjali Foods, PFC, Alkem Labs, Zydus Lifesciences, Aurobindo Pharma, as well as MCX India.

statistics on the home economy

The Street will be watching the publication of the January service PMI data on February 5 in addition to monetary policy and quarterly results. The services PMI statistics for India increased from 56.9 in November 2023 to 59 in December 2023, and analysts predict more increases. January has more climbing ahead of it.

In addition, foreign currency reserves for the week ending February 2 and bank credit and deposit growth for the week ending January 26 will also be announced the following week on January 9.

worldwide economic statistics

Aside from talks by various Federal Reserve officials, market players will be concentrating on China's inflation figures for January, the US employment statistics, and the monthly services PMI data for January.

oil costs

The key factor driving the support for the stock market is the continued favorable crude oil prices for oil-importing nations like India. The week ending February 2 saw international benchmark Brent oil futures tumble 6.8% on heavy trading, giving up the gains of the previous two weeks. Potentially increased interest rates, China's slow economy, and unclear developments in the peace negotiations between Israel and HamasMedia reports caused a decline in prices.

The $85 per barrel level has shown to be restrictive at higher levels as it stays below the same and resides around the 200-day EMA from November 2023; at lower levels, $75 per barrel seems to be a support. In the foreseeable future, experts predict that oil prices will stay within a narrow range.

FII influx

The preceding week saw net selling by foreign institutional investors as well, which may have been brought on by the over 4% increase in US government rates as well as the high stock market values. Last week, they sold shares in the cash category worth around Rs 2,000 crore, while domestic institutional investors kept up their strong support, buying shares worth more than Rs 10,000 crore throughout the week, more than offsetting FII withdrawals.

According to VK Vijayakumar, chief investment strategist at Geojit Financial Services, "FPI remittances into the equity market will depend on a rise in US bond yields and the equity market generalization globally as well as in India."

He thinks that FPIs won't be selling in bulk in February since US bond rates have dropped precipitously once again. "They could also end up purchasing. It's conceivable that money will keep flowing into the debt market."

IPO

As four initial public offerings (IPOs) arrive on Dalal Street next week, the mainboard segment is expected to witness the most activity. The Rs 920 crore IPO of Apeejay Surendra Park Hotels is scheduled to open for business on February 5. The Rs 920 crore IPO of Rashi Peripherals, Jana Small Finance Bank, as well as Capital Small Finance Banks is scheduled for public opening on February 7. The section will raise a total of Rs 2,613 crore in funding.

In the SME sector, Italian Edibles will finish its public offering on February 7 and Alpex Solar IPO will open for subscription on February 8.

Regarding listing, on February 6 BLS E-Services from the mainboard sector will make its stock market debut, while on February 5 shares from Mayank Cattle Food, Harshdeep Hortico, as well as Megatherm Induction from the SME segment will list. Gabriel Pet Straps will make its debut on February 7 and Baweja Studios on February 6.

technological context

Although the Nifty 50 was unable to hold fresh record highs on Friday, it did technically reach the crucial 21,850 threshold. On the daily chart, the index has created two trend-reversal patterns: a double top pattern and a top, shooting star-type pattern. According to analysts, the index may continue to consolidate with immediate support around 21,700 and critical support at 21,500 points if it does not provide a firm closing above the record high of 22,134.

Technically speaking, the new high for the Nifty is a double top; a closure above the 22,126 mark in February may initiate a new wave of buying. Traders and investors are thus only permitted to make aggressive wagers over that threshold. On the negative side, Anand Rathi senior manager of equities research Jigar S. Patel said that 21,500 may be a target for systematic purchasing the next week.

F&O signal

Options data indicated that the Nifty 50 is likely to encounter significant resistance around the 22,100–22,100 range, with potential support coming from 21,600–21,500 in the next sessions.

The weekly options data front indicates that considerable call writing was seen at 22,100 strike, followed by 22,800 and 22,200 strike, and that highest call open interest was observed at 23,000 strike.

Maximum open interest on the put front was at 21,000 strike, then at 21,600 and 21,500 strikes; writing at 21,600, then at 21,000 and 21,900 strikes.

At 21,500 and 21,600 strikes in the Nifty, bulls were seen to be actively writing puts, whilst call writers, or bears, were observed to be pulling out at 21,700 and 21,800 strikes. According to SAMCO Securities derivatives and technical analyst Ashwin Ramani, "this indicates that support for the index has strengthened."

He thinks that options activity near the 22,000 strike may provide clues about where the Nifty is headed next week.