Key developments that will drive the markets this week

Let us look at all important news that could impact market sentiment in the week ahead.

Feb 08, 2021 07:02 IST India Infoline News Service

In a volatile trading session on Friday, Sensex breached the key 51,000 mark today, while Nifty touched the key psychological level of 15,000. Gaining for the fifth straight session, Sensex ended 117 points higher at 50,723 by the closing bell, while Nifty gained 28 points to end at 14,924. Let us look at the events that may drive the market in the week ahead.

Q3FY21 results

With the Q3 earnings entering its last leg, more than 2,400 companies will release their results. These include BPCL, NMDC, Sun TV, Mahanagar Gas, Muthoot Finance, Bata, Eicher Motors, GAIL, SpiceJet, Titan, ACC, Coal India, ITC, Graphite India, MRF, Oil India, Power Grid, Power Finance, RVNL, Bharat Forge, HAL, Info Edge, Nalco, CRISIL, NMDC, Burger King India, Berger Paints India, among others.

Macroeconomic data

The government will announce inflation data for the month of January on 12th February, which will be in focus. Consensus polls expect the number to decline for the month backed by a drop in food prices. Consensus pegs the CPI inflation at 4.40%. Alongside, the official data for industrial production for the month of December will be released on the same day.  Bank loan and deposit growth data for the fortnight ended January 29 and foreign exchange reserves for the week ended February 5 will also be released on the same day.

FIIs

Foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 12,266 crore in the Indian market in the first five trading sessions of February, as positive sentiment post-Union Budget 2021 sparked a rally in investment. As per FPI statistics available with depositories, overseas investors pumped in a net Rs 10,793 crore into equities and Rs 1,473 crore in the debt segment between February 1-5. In the previous month, FPIs invested a net sum of Rs 14,649 crore in Indian markets.

RBI Policy

RBI policy stance and statement are likely to keep the stock markets exuberant over the next few sessions. The Monetary Policy Committee voted unanimously to keep the repo rate unchanged at 4% for the fourth straight meet since May. The central bank that controls the reverse repo rate separately decided to keep it unchanged at 3.35%. While keeping rates unchanged, the RBI decided to reverse the Cash Reserve Ratio cut announced in March 2020 after the Covid-19 crisis hit. Another key announcement of the policy was allowing retail investors access to government bonds via a new direct investment option being offered by the central bank.

US stimulus package

The U.S. Senate approved President Joe Biden’s $1.9 trillion COVID-19 relief package on 5th Feb. The House had passed its own budget resolution and will consider the Senate’s version. The tie-breaking vote was cast by Vice President Kamala Harris in her first tie-breaking vote. Part of Biden’s relief plan calls for gradually raising the minimum wage to $15 an hour, but Congress could be prevented from raising the minimum wage to that amount because of a Republican amendment. Biden’s proposal also aims to increase federal unemployment assistance, expand school aid and provide $1,400 checks to many U.S. citizens. Further, the proposal would provide funds for vaccine distribution and offer aid to schools.

US Stocks:
 
Wall Street’s main indexes extended gains Friday as investors were optimistic about earnings , stimulus package and vaccine rollout.  The Dow Jones Industrial Average DJIA, +0.30% rose 92.38 points, or 0.3%, to close at 31,148.24. The S&P 500 index SPX, +0.39% gained 15.09 points, or 0.4%, to settle at 3,886.83. The Nasdaq Composite Index climbed 78.55 points to reach 13,856.30, a gain of 0.6%.
 
The U.S. Labor Department’s employment report showed 49,000 jobs were added in January, while the unemployment rate fell to 6.3% from 6.7%. The results affirm the view that the recovery in the jobs market is stalling out amid the COVID-19 pandemic that has slammed the U.S. economy. Some 10 million jobs that vanished in the early stages of the pandemic still haven’t returned. The January report follows a reading from December that showed that 140,000 jobs were lost, marking the first monthly decline in employment figures in about eight months when the COVID-19 pandemic first walloped the country.
 
Still, investors appeared upbeat on the basis of healthy earnings from American corporations in the second-busiest week of fourth quarter reporting season results, along with prospects for Congress passing President Joe Biden’s $1.9 trillion coronavirus relief package, using a special reconciliation procedure. The Senate early Friday approved a budget resolution, 51-to-50, that would allow for a fast tracking of the $1.9 trillion coronavirus relief plan.

Related Story

Open Free Demat Account (Rs699)