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.

February 15, 2021 7:16 IST | India Infoline News Service
After trading near record highs in the early session, equity market indices turned volatile and closed flat on Friday, amid mixed cues from global equities. Sensex ended 12 points higher at 51,544 and Nifty fell 10 points to 15,163. Earlier in the day, Sensex hit a record high of 51,804 and Nifty hit a lifetime high of 15,243. Let us look at the events that may drive the market in the week ahead.

Q3FY21 results

The Q3 earnings are on its last leg, with nearly 44 companies left to release their earnings. There are a handful Nifty companies left in the mix as well. Some of the companies expected to release their earnings this week are Nestle India, Ambuja Cements, R Systems International, Mahindra CIE Automotive, Binani Industries, Jet Airways, GM Polyplast, Uniply Decor, Varun Beverages, and Schaeffler India.

Overseas investors pumped in Rs22,038cr into the Indian markets in February so far amid positive sentiments around the Union Budget. According to depositories data, overseas investors poured Rs 20,593 crore into equities. In January, Foreign Portfolio Investors (FPIs) were net investors to the tune of Rs14,649cr.

Macroeconomic data

Investors will react to the industrial production data (IIP) and consumer price inflation data (CPI) for January released post market hours on Friday.  India’s factory output returned to growth in December after contracting in the preceding month, while retail inflation eased to a 16-month low in January.
Data released by the National Statistical Office (NSO) showed the Index of Industrial Production (IIP) grew 1% in December against a 1.9% contraction registered in November, as manufacturing output and electricity generation grew at 1.6% and 5.1%, respectively, while mining contracted 4.8%.
Data separately released by NSO showed retail inflation easing to 4.06% in January from 4.59% in December. Food inflation eased to a 20-month low at 1.89% in January as vegetable prices dropped by 15.84%. Retail inflation in rural and urban India stood at 3.23% and 5.06%, respectively.
Furthermore, the WPI inflation data for January will be released on today. The balance of trade data will also be released today, while foreign exchange reserves for week ended February 12 will be declared on Friday.

Federal Reserve minutes of the meet

Investors will await the Federal Open Market Committee’s minutes of meet, which will be released this Thursday.  In its latest meeting, the Federal Reserve maintained its super-accommodative monetary policy, but a brighter medium-term outlook suggests that a change may be on the horizon. The central bank’s policy-making body also repeated it would maintain its bond-buying program at the current pace of $120 billion of purchases per month until “substantial further progress” toward its employment and inflation goals has been made. It made no changes to the composition of purchases. The central bank also added a mention of vaccinations to its statement, saying the economy’s path will depend significantly not just on the coronavirus itself but also on progress with inoculations.
Some Fed officials have suggested in recent weeks that tapering of the bond-buying program could begin as soon as late 2021, though Jerome Powell said on Jan. 14 that “now is not the time to be talking about exit.” A deeper read of the FOMC minutes of the meet will give a broader understanding of the views of policymakers in this regard.

Initial Public offer

There are 2 new companies that are set to hit the IPO market this week.
  • Nureca- Nureca's Rs100 crore will open for subscription today and will close on will close for subscription on Feb 17. The public offer of of Nureca, which owns the Dr Trust brand, will be open for three day between February 15 and 18, 2021. The shares will be sold in the price band of Rs396-400 and are set to be listed on the BSE and NSE exchanges. The company raised Rs44.55cr from two anchor investors on Friday, Feb 12. Investors can bid for a minimum one lot of 35 equity shares and in multiples extending up to 14 lots. A total of up to 75% of the issue will be reserved for qualified institutional buyers, up to 10% for retail investors and the rest 15% for the non-institutional category.
  • RailTel- The company’s Rs820 crore initial public offer (IPO) will be open for subscription from February 16 to February 18, at an issue price of Rs93-94 per share. The shares of RailTel are set to be listed on the BSE and NSE on February 26. The initial public offer is an offer for sale of 8.71cr equity shares by the government, out of which 5 lakh equity shares will be reserved for the employees. Investors can bid for a minimum one lot of 155 equity shares and in multiples thereafter, up to 13 lots. The quota for retail investors in RailTel IPO is fixed at 35%, qualified institutional buyers quota is 50% and non-Institutional Investors segment is 15%. Investors can subscribe for a minimum one lot of 155 shares and in multiples, till a maximum 13 lots.
US Stocks
Wall Street’s main indexes closed at record highs Friday, as investors hoped for additional financial aid from Washington to boost the economic recovery amid a drop in coronavirus cases. The Dow Jones Industrial Average rose 27.70 points, or 0.1%, to 31,458.40, closing at a record. The S&P 500 climbed 18.45 points, or 0.5%, to 3,934.83. The Nasdaq Composite COMP, +0.50% gained 69.70 points, or 0.5%, to 14,095.47, booking another record close.
A House committee on Thursday approved half of Biden’s relief plan, advancing $1,400 payments to millions of Americans alongside other measures opposed by Republican lawmakers. Treasury Secretary Janet Yellen called for further fiscal support in a virtual meeting with G7 finance ministers and central bank governors.
The U.S. is on pace to exceed Biden’s goal of administering 100 million vaccine doses in his first 100 days in office, with more than 26 million shots delivered in the past three weeks. Roughly 34.7 million out of some 331 million Americans have received at least their first dose of vaccine, according to the CDC. In the past week, an average of 1.62 million doses a day were administered. Biden on Thursday said the U.S. will have enough COVID-19 vaccine by the end of the summer to inoculate 300 million Americans.

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