Top 10 things to know before the market opens

Trends on SGX Nifty indicate a gap-up opening for the broader index in India with a gain of around 146 points.

 

The Indian stock market is expected to open in the green as trends on SGX Nifty indicate a gap-up opening for the broader index in India with a gain of 146 points.

On the first day of February series, January 28, the market started with a bounce back but failed to sustain it and lost more than 270 points from day’s high on the Nifty50 in last couple of hours of trade to close with moderate loss. Heavy FII selling, caution ahead of Union Budget and weak global cues weighed on the sentiment.

The BSE Sensex was down 76.71 points to close at 57,200.23, while the Nifty50 declined 8.20 points to 17,102 on Friday and formed bearish candle which resembles Shooting Star kind of pattern formation on the daily charts. The index corrected 3 percent during the week, forming bearish candle on the weekly scale.

According to pivot charts, the key support levels for the Nifty are placed at 16,994.83, followed by 16,887.77. If the index moves up, the key resistance levels to watch out for are 17,291.23 and 17,480.57.

Stay tuned to Moneycontrol to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms which could impact Indian as well as international markets:

US Markets

Wall Street surged on Friday, notching its best day so far in 2022 after another zigzag session, ending a tumultuous week marked by mixed corporate earnings, geopolitical turmoil and an increasingly aggressive Federal Reserve.

All three major US stock indexes began the day in the red, but turned increasingly green as the session progressed, with tech shares doing the heaviest lifting.

The Dow Jones Industrial Average rose 564.69 points, or 1.65%, to 34,725.47, the S&P 500 gained 105.34 points, or 2.43%, to 4,431.85 and the Nasdaq Composite added 417.79 points, or 3.13%, to 13,770.57.

Asian Markets

Asian share markets made a cautious start to a week that is likely to see a rise in UK interest rates and mixed reports on U.S. jobs and manufacturing, while surging oil prices added to worries over inflation.

Lunar New Year holidays made for thin conditions and MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1% in slow trade. Japan’s Nikkei dipped 0.3% as data on industrial output and retail sales undershot forecasts.

GDP in focus for Economic Survey despite recent misses

The Economic Survey, which is tabled in Parliament a day before the Union Budget to present the state of the economy and suggest policy prescriptions, quite often misses on the GDP forecast, sometimes by a significant margin.

Finance Minister Nirmala Sitharaman will table the Economic Survey for 2021-22 in the Lok Sabha today soon after the President’s Address to both Houses of Parliament. She will present the Union Budget for the next financial year beginning April 1, 2022, tomorrow.

One of the most-watched numbers in the pre-Budget Economic Survey, authored by a team led by the Chief Economic Advisor (CEA), is the projection of the Gross Domestic Product (GDP) for the next fiscal. The previous economic survey was presented in the midst of the COVID-19 pandemic.

SGX Nifty

Trends on SGX Nifty indicate a gap-up opening for the broader index in India with a gain of 146 points. The Nifty futures were trading around 17,238 levels on the Singaporean exchange.

Goldman Sachs expecting five rate hikes this year

Goldman Sachs is forecasting that the US Federal Reserve will raise interest rates five times in 2022, versus four previously, with a hike expected in March, according to a note from its economists late on Friday.

Economists have scrambled to update rate hike expectations since the Fed on Wednesday said it was likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month in what Fed Chairman Jerome Powell pledged will be a sustained battle to tame inflation.

Indian economy needs more hand-holding, fiscal correction can wait: Report

Warning that any sudden and sharp fiscal consolidation steps can throttle the nascent and uneven recovery of the Indian economy, a Wall Street brokerage has said the Budget should instead focus on boosting overall demand, from rural consumption in particular, and invest more in infrastructure.

The successive waves of the pandemic has made it more difficult to reduce government debt as a share of GDP in the medium-term, said Goldman Sachs in a pre-Budget note.

The brokerage believes that even though allocation for COVID related expenses will come down, the government will have to continue to focus on welfare spending and also expects capex to increase 12 percent.

 

FPIs withdraw Rs 28,243 crore from Indian equities as US Fed signals rate hike

Foreign portfolio investors (FPIs) pulled out a whopping Rs 28,243 crore from Indian equities in January as US Fed signalled interest rate hike. As per the depositories data, FPIs took out Rs 28,243 crore from equities between January 3-28.

During the same period, they pumped in Rs 2,210 crore into debt segment and Rs 1,696 crore into hybrid instruments. The total net outflow stood at Rs 24,337 crore. The total net outflow stood at Rs 24,337 crore.

With the latest pull out of funds from Indian markets, FPIs have become net sellers for fourth consecutive month. “With US Fed signalling that it will start hiking interest rates soon and shrink its bond holdings, FPIs went on a selling spree in the Indian equity markets,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.

India gold demand surges in 2021, jewellery purchases almost double: World Gold Council

Gold demand in India overcame pandemic woes to stage a remarkable recovery, surging 79 percent in 2021 on the back of pent-up purchases in the last quarter of the year. Demand for the precious metal climbed to 797.3 tonnes last year from 446.4 tonnes in 2020, the World Gold Council said in a report on January 28.

“India’s gold demand recovered by 79 percent, chiefly a result of an exceptional Q4 demand of 343 tonnes that surpassed even our most optimistic expectation articulated in Q3 and turned out to be the best quarter in our recorded data series,” said Somasundaram PR, regional CEO, India, World Gold Council.

Results today

More than 100 companies will release their quarterly earnings on January 31 including Tata Motors, BPCL, HPCL, Indian Oil Corporation, UPL, Sun Pharmaceutical Industries, DLF, Aarti Drugs, ADF Foods, Ajanta Pharma, LT Foods, Dwarikesh Sugar Industries, Edelweiss Financial Services, Exide Industries, GIC Housing Finance, Housing Development & Infrastructure, Hester Biosciences, Infibeam Avenues, Jindal Saw, KEC International, KPIT Technologies, Krsnaa Diagnostics, Navin Fluorine International, Satin Creditcare Network, Shipping Corporation of India, Suven Life Sciences, UCO Bank, Venus Remedies, and Voltamp Transformers.

FII and DII data

Foreign institutional investors (FIIs) net sold shares worth Rs 5,045.34 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 3,358.67 crore in the Indian equity market on January 28, as per provisional data available on the NSE.

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