Market eyes Q3 results, macro data, and crude as second-week beckons

The Sensex gained a healthy 542.3 points (0.75%) over the week, while the Nifty 50 advanced by 183.75 points (0.84%). Notably, the Nifty 50 now sits just 100 points shy of the psychologically significant 22,000 mark.

Indian equity markets are set for a potentially eventful second week as investors navigate a confluence of triggers, including the ongoing earnings season, domestic cues, macroeconomic data releases, primary market activity, foreign fund flows, crude oil price movements, and stock-specific developments.

After a two-week consolidation phase, the benchmark Sensex and Nifty 50 indices ended last week on a high note, closing near their peak levels. The Sensex gained a healthy 542.3 points (0.75%) over the week, while the Nifty 50 advanced by 183.75 points (0.84%). Notably, the Nifty 50 now sits just 100 points shy of the psychologically significant 22,000 mark.

One of the key drivers of the market’s upbeat performance was the stellar showing of the IT sector. The Nifty IT index surged 5.14% – its best single-day performance since October 8, 2020 – and scaled a 21-month high. Market heavyweights Infosys and Tata Consultancy Services (TCS) were the primary catalysts behind this rally, emerging as the top contributors to the Sensex’s gains.

Looking ahead to the second week, the earnings season will remain in focus, with several companies scheduled to report their October-December quarter results (Q3FY24). Investors will be keen to assess the impact of ongoing global headwinds, such as rising inflation and interest rates, on corporate performance and future guidance. Early indications suggest mixed results, with some companies like Infosys exceeding expectations, while others like Larsen & Toubro falling short.

Beyond earnings, a slew of domestic cues and macroeconomic data releases will also keep investors on their toes. The Index of Industrial Production (IIP) for November and the Consumer Price Index (CPI) for December are due this week, offering insights into the health of the manufacturing sector and inflationary pressures, respectively. Additionally, the minutes of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting will be released, providing clues about the central bank’s future stance on interest rates.

The primary market is also expected to see some action this week with the initial public offering (IPO) of Adani Wilmar, a leading player in the food and agri-business sector. The success of this IPO will be closely watched as a gauge of investor appetite for new listings in the current market environment.

Foreign capital inflows will continue to be a key determinant of market sentiment. While FIIs have been net buyers in recent weeks, any sudden reversal in their flows could trigger volatility. Additionally, global crude oil prices will be closely monitored, as higher energy costs could put further pressure on inflation and dampen investor sentiment.

Finally, stock-specific developments will also play a role in shaping the market’s trajectory. Any significant news or announcements from individual companies could lead to sharp movements in their respective stocks and potentially impact broader market sentiment.

With a multitude of triggers on the horizon, investors need to be prepared for potentially high volatility and adjust their strategies accordingly. Closely monitoring earnings reports, key data releases, global cues, and stock-specific developments will be crucial for navigating this dynamic market landscape.