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Equity markets this week will take cues from global trends, trading activity of foreign investors and quarterly earnings
Last week, the BSE benchmark jumped 524.04 points, or 0.66 per cent, and the Nifty climbed 191.35 points, or 0.80 per cent.
Stock Market Update: Equity markets this week are expected to be driven by global trends, foreign investor activity, and quarterly earnings, with TCS set to kick off the results season on Thursday, analysts noted.
Key Market Drivers for the Week Ahead
Macroeconomic Data and Rupee-Dollar Trend
Experts believe that market trends this week will be heavily influenced by macroeconomic data announcements and the rupee-dollar trajectory. The rupee depreciated by 4 paise to close at a record low of 85.79 against the US dollar on Friday, adding further pressure on market sentiment.
Q3 FY25 Earnings Season Kicks Off
The much-anticipated Q3 FY25 earnings season begins this week, with IT giants and financial institutions set to announce their results. Tata Consultancy Services (TCS) and Tata Elxsi will declare their results on Thursday, January 9, 2025.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, noted, “Investors will closely monitor individual stock performances as TCS’s results could be a key trigger, potentially reversing the trend of foreign institutional investor (FII) outflows.”
Institutional Activity in the Spotlight
Foreign institutional investors (FIIs) have remained net sellers, while domestic institutional investors (DIIs) continue to show buying interest. This ongoing tug-of-war between FIIs and DIIs is expected to play a crucial role in determining market direction this week, Gour added.
Other Key Influences: Economic Data and Global Events
Economic Indicators to Watch
Ajit Mishra, SVP, Research, Religare Broking Ltd, highlighted that a slew of economic data will also shape market sentiment. “Key releases include HSBC Services PMI and Index of Industrial Production (IIP), which will provide further cues on economic health,” he said.
Focus on Global Developments
On the global front, the announcement of the Federal Open Market Committee (FOMC) minutes will be critical in assessing the Federal Reserve’s future policy stance.
Market Performance and Trends
Last week, the BSE Sensex gained 524.04 points (0.66%), while the Nifty climbed 191.35 points (0.80%). However, the market witnessed sharp declines on Friday, with the Sensex tumbling 720.60 points (0.90%) to close at 79,223.11, and the Nifty dropping 183.90 points (0.76%) to 24,004.75.
Challenges Persist Amid Pessimism
Despite a short-lived recovery in the previous sessions, markets lost momentum due to multiple headwinds. These include slowing growth, high domestic valuations, foreign fund outflows, and uncertainty surrounding U.S. trade policies under President Trump’s second term.
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, commented, “Markets may witness bouts of correction as caution prevails among investors. Global developments will remain a key factor.”
Outlook for the Coming Week
Vinod Nair, Head of Research, Geojit Financial Services, emphasized the importance of Q3 earnings. “The market will focus on quarterly results, with expectations of improvement on a QoQ basis,” he said.
As the week unfolds, investors are advised to remain vigilant and weigh domestic earnings, macroeconomic indicators, and global policy cues to navigate the volatile market environment.
(With PTI inputs)
