Winning is a habit – Vincent T Lombardi
NEW DELHI: Treading with this valiant attitude, the bulls on Dalal Street finished yet another week on a terrific note, taking the winning streak to a sixth straight week.
Neither surging oil prices nor lower GDP forecast for FY18 have dampened spirit of the investors, who were all out on a shopping spree.
On Friday, the domestic benchmark indices settled at a fresh lifetime peak. The BSE Sensex ended just shy of 34,600, at 34,592 (up 89 points) and the broader Nifty50 index of NSE rose 30 points to close at 10,681.
On a weekly basis (January 8- January 12), the 30-share pack gained 240 points, or 0.69 per cent while the Nifty added 58 points, or 0.54 per cent.
Positive Q3 numbers from IT majors TCS and Infosys are likely to give further boost to investor sentiment. However, a spike in inflation and concerns over possible fiscal slippages may put some pressure on the ongoing rally.
Let's find out key events that are lined up for the next week that may influence the market.
Q3 earnings: A host of companies are slated to release their quarterly results next week.
Among notable names, Adani Power and Adani Transmission will announce their numbers on January 17, while Adani Enterprises and Adani Ports will release theirs on January 18. Telecom major Bharti Airtel and Rana Kapoor-led YES Bank will also announce their results on January 18. Earnings of HDFC Bank, HDFC Life, Kotak Mahindra Bank and Reliance Industries (RIL) will come out on Friday (January 19).
Macro numbers: There's good news and a bad news on the macro front. The good news is, India's November factory output jumped to a 25-month high driven by robust growth in manufacturing and affirming expectations of stronger second half growth in FY18. The index of industrial production (IIP) rose 8.4 per cent from a year ago, data issued by the Central Statistics Office showed on Friday.
However, the retail inflation spiked to a 17-month high of 5.21 per cent in December led by an increase in food and housing prices, data released by Central Statistics Office (CSO) showed. Market may witness some volatility over surging inflation.
Run-up to the Budget: The countdown to the Union Budget 2018 has already begun. Announcements on some pressing issues like tax on long-term capital gains (LTCG) and personal tax will be keenly watched.
Technical factor: On Friday, the Nifty50 index made a Dragonfly Doji pattern on the daily chart and a bullish candle on the weekly chart. In a Doji pattern, the index opens high and closes around the same level, suggesting a balance of power between the bulls and the bears.
Mazhar Mohammad of Chartviewindia.in said when a Dragonfly Doji is formed, it is seen as a major turning point, where the bulls and the bears try to establish supremacy. Traders can carry their bullish bets with a stop loss below 10,592 on a closing basis and look for a target of 10,750, Mohammad added.
Two IPOs to hit D-Street: IT firm Newgen Software Technologies will launch its initial public offer (IPO) on January 16 to raise about Rs 424 crore. The company has fixed a price band of Rs 240-245 per share. ICICI Securities and Jefferies India are the global coordinators and book running lead managers to the offer. IDFC Bank is the book running lead manager to the offer, reports PTI. The issue will close on January 18.
This apart, Amber Enterprises, a Gurugram-based contract manufacturer, will also launch its Rs 555-crore IPO next week. The IPO comprises fresh issue of shares worth Rs 450 crore and an offer-for-sale to the tune of Rs 105 crore. The price band has been fixed at Rs 855-Rs 859 per equity share. The issue will open on Jan 17 and close on Jan 19.
Stocks in Focus: Shares of HDFC are likely to hog limelight when trading resumes on Monday. The company has bagged Rs 11,104 crore investments from marquee investors such as GIC Singapore, KKR, Canadian pension plan Ontario Municipal Employees Retirement System, Carmignac Group and Premji Invest. This would lead to a stake dilution of 3.87 per cent.
Moreover, IDFC Bank and Capital First will also be on investors' radar as the two announced merger to form a combined entity with assets under management of Rs 88,000 crore, branch network of 194 and customer base of over 5 million.
Global cues: The movement of crude prices will have investors on the edges. Oil prices breached $70 a barrel last week. China will unveil its fourth quarter GDP data on Thursday. The economy is expected to grow 6.8 per cent YoY and 1.7 per cent QoQ.