Investors are closely monitoring multiple factors in the upcoming week that could influence the stock market. These include the ongoing release of October-December quarter results for fiscal 2023-24 (Q3FY24), the upcoming Monetary Policy Committee (MPC) meeting by the Reserve Bank of India (RBI), foreign capital inflow, and various domestic and global cues.
Positive Momentum in Domestic Equity Markets
Last week, domestic equity benchmarks BSE Sensex and Nifty 50 witnessed their best performance in 2024, fueled by the government’s fiscal prudence in Interim Budget 2024. The Nifty 50 index hit a record high for the fifth time this year, driven by gains in heavyweights such as Reliance Industries and IT stocks.
Market Rebound and Highlights
After spending two weeks in a corrective phase, the markets rebounded, gaining around two percent, primarily driven by favorable cues. Large-cap stocks like Reliance Industries led the frontline indices to new highs. The BSE benchmark rose by 1,384.96 points (1.95%), and the Nifty climbed by 501.2 points (2.34%) on a weekly basis.
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Expectations for RBI’s Policy Meeting
With the US Fed and Interim Budget no longer in focus, attention turns to the RBI’s policy meeting in the coming week. Analysts expect the central bank to maintain its current stance. Overall, the market is anticipated to remain in positive territory, buoyed by high sentiments following a commendable delivery on the budget.
Earnings Season and IPO Activity
The ongoing Q3FY24 earnings season will play a pivotal role in market movements, with major companies like Apollo Hospital, Bharati Airtel, and others set to announce their quarterly results. Additionally, a busy week is expected in the primary market, with new IPOs and listings scheduled.
Foreign and Domestic Institutional Investments
Foreign institutional investors (FIIs) and domestic institutional investors (DIIs) played contrasting roles last week, with FIIs divesting ₹2,008.68 crore and DIIs investing ₹10,102.62 crore. FPIs, after a selling streak in January, turned positive in February, influenced by global cues.
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Global Market and Economic Indicators
Global markets, including Nasdaq and Dow Jones, showed positive signs in January. Factors like US bond yields, the dollar index, and geopolitical events, particularly Israel-Hamas negotiations and OPEC’s production cut, will be closely monitored.
Oil Prices and Economic Data
Oil prices experienced a decline due to US job data affecting expectations of interest rate cuts. The market will also react to major global economic data, including US trade balance, initial jobless claims, and China’s inflation numbers.
Ex-Dividend and IPO Listings
Several companies, including ITC, HPCL, and others, will trade ex-dividend, while some will trade ex-bonus and ex-split in the coming week.
Technical Analysis and Market Outlook
Nifty 50’s positive tone persists, but a decisive close above 22,150 is crucial for the next leg of the upmove. Analysts suggest maintaining focus on banking majors for a steady uptrend, while sectors like energy, auto, IT, metal, and pharma continue to perform well.
Bank Nifty and Cautionary Approach
Bank Nifty bears regained control, and a failure to surpass 46,500 could intensify selling pressure. Traders are advised to approach the market with caution and implement strict risk management measures amid heightened volatility.