Budgetary expectations, Q3 results to drive equities

Expectations from the upcoming Union Budget, along with global cues and domestic quarterly earning results, are expected to determine the trajectory of Indian equities markets in the upcoming week.

Market observers pointed out that investors are expected to closely follow rupee volatility, global crude oil prices and the assessment of the demonetisation impact on the India Inc's bottom line.

"The markets would look for further reaffirmation from corporate earnings and data if demonetisation has impacted the growth and to what extent," Devendra Nevgi, Chief Executive of Zyfin Advisors, told IANS.

Nevgi elaborated that the build-up of expectations from the upcoming Union Budget will be another major theme for the equity markets.

"The upcoming budget and the Reserve Bank of India's policy in February would be keenly watched," Nevgi said.

According to V.K. Vijayakumar, Chief Investment Strategist at Geojit BNP Paribas, global stock markets will view US President Donald Trumps' remarks on protectionist economic policies.

"President Trump's remark -- Buy American, Hire American -- is extremely disturbing," Vijayakumar noted.

"Protectionist nationalism is bad for global economy, global trade and markets. Stock markets will view this negatively."

Another major event for the week starting January 23, 2017 will be BSE's IPO (Initial Public Offering) which starts on Monday with an offer size of nearly Rs 1,250 crore.

The maiden public issue will off-load 15,427,197 equity shares with a face value of Rs 2 each via a book-building route with a price band of Rs 805-Rs 806.

At the upper band, the size works out to Rs 1,243.43 crore.

"BSE IPO's valuation looks attractive in comparison to the other listed exchange which is the MCX," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

Established in 1875, the company is the country's biggest bourse in terms of listed companies with 5,868 on its platform. But the exchange's own shares will trade on the rival National Stock Exchange (NSE) platform.

On technical-levels, the NSE Nifty is expected to further correct.

"Technically, the Nifty has broken down from the consolidation range it was trading within for the last several days," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.

"The coming week could see the Nifty slide further towards the next support of 8,306-8,275 points."

Furthermore, the Indian rupee is likely to hold on to its present range of 67.70-50 to 68.22-32.

"Rupee is expected to be in the similar range, as global markets have ironed out noises in terms of UK's Brexit line and Trump's Presidential coronation," Hiren Sharma, Senior Independent Currency Analyst, said.

On a weekly basis, the Indian rupee had weakened by three paise to 68.19 against a US dollar.

In addition, the pace of FIIs' (Foreign Institutional Investors) fund inflow into equity segment will be one of the crucial determining factor for the movement of key indices.

The provisional figures from the stock exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 44.5 crore, whereas domestic institutional investors (DIIs) purchased stocks worth Rs 45.4 crore.

Accordingly, figures from the National Securities Depository (NSDL) disclosed that FPIs were mainly net sellers in the stock market. They sold a total of equity and debt instruments worth Rs 1,579.61 crore, or $231.12 million from January 16-20.

Last week, the key domestic indices were pulled lower due to negative global cues, broadly weak quarterly results and a depreciating rupee.

The correction in the Indian equity markets came after three weeks of consistent gains.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE receded by 203.56 points or 0.75 per cent to 27,034.50 points.

Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 51 points or 0.60 per cent to 8,349.35 points.