Dalal Street Week Ahead: Here are 10 key factors that will keep traders busy next week
The market hit a fresh record high and gained 1.6 percent in the week gone by, but overall witnessed consolidation. The BSE Sensex rallied 812.67 points to 51,544.30 and the Nifty50 climbed 239.05 points to 15,163.30 in the week ended February 12. Meanwhile, the broader markets outperformed with Nifty Midcap index rising 2.18 percent and Smallcap index up 3.85 percent.
Given the end of corporate earnings season and major events out of the way, the market is expected to see further consolidation and will look for global cues for direction going ahead, experts feel.
Here are 10 key factors that will keep traders busy next week:
1) IPO and Listing
Two initial public offerings hit Dalal Street next week. Healthcare and wellness products distributor Nureca will open its Rs 100-crore IPO on February 15. The price band for the offer has been fixed at Rs 396-400 per share and the issue will close on February 17.
State-owned information and communications technology infrastructure provider RailTel Corporation of India will open for subscription on February 16. The price band is fixed at Rs 93-94 per share and the offer will close on February 18.
Meanwhile, Brookfield India Real Estate Trust, India's only institutionally managed public commercial real estate vehicle, will list its equity shares on February 17 as per the schedule available in the prospectus.
2) Earnings
The major key corporate earnings season is out of the way but there are still about 44 companies to release December quarter scorecard in the coming week. These include Nestle India, Varun Beverages, Ambuja Cements, R Systems International, Schaeffler India, Mahindra CIE Automotive, Binani Industries, Jet Airways, GM Polyplast, Uniply Decor, Uniply Industries, Enkei Wheels and Rollatainers.
3) FII Flow
The foreign institutional investors continued to pour money into Indian equities. In January and February this year, they net bought more than Rs 39,400 crore on top of over Rs 1.66 lakh crore of buying in the previous calendar year, thanks to the growth-oriented Budget, controlled coronavirus infections, smooth ongoing vaccination programme and weakness in dollar index amid uncertainty over US economic growth.
Hence, whether the same amount of flow will continue in the coming weeks would be a key thing to watch out for.
On the other side, domestic institutional investors slowed down their selling in February as they net sold Rs 624 crore worth of shares in the current month, against nearly Rs 1.15 lakh crore of selling in previous four consecutive months.
4) Coronavirus
The country kicked-off the second phase of the vaccination drive on February 13 for healthcare workers. Since the beginning of the first phase on January 16, more than 79 lakh healthcare workers have been vaccinated. India has been using Covaxin vaccine developed by Bharat Biotech, and Covishield developed by Oxford University and AstraZeneca. Covishield is manufactured by Serum Institute of India.
On the other side, the recovery rate has further improved to 97.32 percent with positivity rate of 1.25 percent. India reported 1.09 crore confirmed infections with 1.55 lakh deaths but the recovered cases stood at over 1.06 crore and the active cases further dropped to 1.36 lakh.
Globally, the most affected countries include the US, UK, Spain, Germany and South Africa but they are also witnessing a fall in infections and deaths.
5) Crude Oil Prices
Given the declining coronavirus cases globally, an eventual return to normalcy and hope of US stimulus bill lifted sentiment in crude, though the upside was capped due to weak demand forecast from OPEC and the International Energy Agency.
International benchmark Brent crude futures closed above $62 a barrel last week rising 67 percent since November last year.
Experts expect the travel restrictions globally and weak demand forecast to cap upside in oil prices, but if the oil prices increase further and cross $70 a barrel then that could be a concern for India which is the second oil importer worldwide.
6) Economic Data Points
The WPI inflation data for January will be released on Monday, which experts feel will influence the manufacturing industry in building a foundation for the Q4 outlook.
The balance of trade data for January will also be released on the same day, while foreign exchange reserves for week ended February 12 will be declared on Friday.
7) Technical View
The Nifty50 fell 10 points on Friday and gained 239 points for the week, forming a Doji pattern on the daily charts and small bullish candle on the weekly scale.
The market after every consolidation has been hitting record highs, but given the chart patterns of the last few sessions and other data points, the coming days need to be closely watched for the direction.
15,300 – 15,000 is a crucial range and a breakout on either side should ideally dictate the direction. But in case of an upside breakout, we would avoid aggressive participation. As of now, we do not see Nifty going beyond 15,450 – 15,600. So we would continue to advise booking profits if Nifty enters this mentioned zone.
On the flip side, the action below 15,000 would be an interesting one to participate in, and in this scenario, a healthy profit booking towards 14,600 – 14,400 cannot be ruled out.
8) F&O Cues
The option data indicated that the Nifty could see a wider trading range of 14,500 to 15,500 levels, and an immediate range of 15,000 to 15,300 levels.
Maximum Call open interest was seen at 15,500, 16,000 and 15,200 strikes, while maximum Put open interest was seen at 14,500, 15,000 and 14,200 strikes.
Call writing was seen at 15,800, 15,600 and 15,100 strikes, with Call unwinding at 15,000, 14,800 and 14,500 strikes. Put writing was seen at 14,400 and 15,200 strikes, with Put unwinding at 14,500 strike.
"Significant Call option concentration is placed at ATM 15,200 strike for coming weekly settlement followed by 15,500 strike. Hence, a move above 15,200 may take the index towards 15,500 towards settlement. On the lower side, immediate and major support for the Nifty remains at the 15,000 strike," ICICI Direct said.
The volatility also declined to around 22 levels, from 24 levels seen at the beginning of the week. "As most events are over, we believe a further decline in volatility would be seen in coming sessions and any surge from these levels can be considered as a sign of caution after sharp upsides," the brokerage said.
9) Corporate Action
Here are key corporate actions taking place in the coming week:
Global Cues
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