Key developments that will drive the markets this week

3 Jan 2022 , 07:40 AM

Domestic markets ended the final week of 2021 with decent with the Nifty settled at 17,354.05; up by 2.1%. The benchmark started the week on a firm note, however, concerns around Omicron hampered investors’ sentiments globally which also kept domestic markets on edge in the middle. The coming week marks the beginning of a new month and participants will be closely eyeing some crucial high-frequency data like monthly auto sales, India Manufacturing PMI and India Services PMI.

Besides, updates on the COVID situation and performance of global markets will also be critical with Union Budget, assembly elections.

Let us look at the key developments this week.

Auto sales in focus

The markets will react today on auto stocks for the monthly sales data released over the weekend. As many companies posted their numbers at the weekend and indicated that the chip shortage is gradually easing.

Maruti Suzuki witnessed a 4.4 per cent yoy decline in sales, largely due to weak domestic growth but reported its highest-ever monthly exports of 22,280 units in December.

Tata Motors clocked a 24 per cent yoy growth in domestic sales for December.

Eicher Motors reported a 25.8 per cent yoy growth in the commercial vehicle segment and its Royal Enfield sales increased 7 per cent yoy.

Escorts saw a 39 per cent down in tractors sales yoy in December 2021.

Mahindra & Mahindra also witnessed a 19 per cent yoy decline in monthly sales but there was an increase in its commercial vehicle and passenger vehicle sales.

Macroeconomic data to watch out

India’s Markit Manufacturing PMI numbers for December will release today, Markit Composite PMI and Services PMI data for December will be released two days later and Foreign exchange reserves for the week ended will be released on January 31.

FII & DII flow

Foreign institutional investors (FII) remained net sellers, the net sold Rs2,217cr worth of shares in the last week of 2021, taking December selling to Rs35,494cr, the second-highest during the year after November.

Domestic institutional investors (DII) continued to support the market, buying Rs4,273cr worth of shares during the week. Total buying in December stood at Rs31,231cr, the highest monthly buying in 2021.

Global cues to look out

United States: A private PMI survey on manufacturing activity in the world’s largest economy is due on Tuesday. Minutes of the last scheduled meeting of the US central bank will be released on Thursday. Data on unemployment is due on Friday.

Europe: PMI manufacturing survey data on the United Kingdom is due on Tuesday. Germany’s inflation data is due on Thursday.

Asia: PMI manufacturing survey data on China is due on Tuesday. Data on consumer confidence in Japan is slated for a release on Wednesday.

Gold & Silver outlook

MCX Gold remained negative during the week. On the weekly chart, the price remained above 50EMA. The momentum indicator, stochastic on the weekly timeframe is in the bearish crossover. Therefore, the price may remain sideward during the next few days. On the lower end, immediate support is visible at 47,500, below which price may correct towards 46,800. On the higher end resistance is visible at 48,800/49,500.

MCX Silver price remained positive during the week. The price closed below 20EMA on the weekly chart. Stochastic on the weekly timeframe is in the bullish crossover. The bias is expected to remain sideward to positive over the short term. Support is seen at 61,000 whereas resistance is visible at 63,500/64,500.

Covid-19 & Omicron cases in India

According to the public health department, said Maharashtra on Sunday reported 11,877 fresh Covid-19 cases along with 9 deaths. The state also detected 50 new Omicron cases taking the total tally of the new variant to 510, 2,069 recoveries were also reported in the state. Active cases in Maharashtra stand at 42,024.

Mumbai on Sunday recorded 8,063 new Covid-19 cases along with 578 recoveries. The city had on Saturday reported 6,347 infections. The active Covid cases in Mumbai stand at 29,819.

Global coronavirus infections hit a record high over the past seven-day period, with an average of just over a million cases detected a day worldwide between December 24 and 30, up some 100,000 on the previous peak.