Q3 results setting the tone for markets

New Delhi: Quarterly earnings, global trends and trading activity of foreign investors will drive stock markets in this holiday-shortened week, analysts said. It will be a trading holiday on January 22, with the Maharashtra government announcing a holiday in connection with the consecration of the Ram Temple in Ayodhya. Equity markets would also remain closed on Friday for Republic Day.

“The interest rate decisions of the BoJ (Bank of Japan) and ECB (European Central Bank), along with the US GDP data, are anticipated to drive the market dynamics,” said Vinod Nair, Head of Research, Geojit Financial Services.

From the Q3 results front, Axis Bank, JSW Energy, Bajaj Auto, DLF, ACC and JSW Steel would announce their earnings this week.

“This is a truncated trading week following a holiday on Monday and on Friday. Traders should stay light as earnings season would get in full swing leading to stock-specific actions largely. Moreover, interest rate decisions of the BoJ and the ECB is due this week along with the US GDP and PMI data which would have an influence on the global rate cut trajectory,” Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said. Last week, the 30-share BSE benchmark fell by 1,144.8 points or 1.57 per cent. The NSE and BSE conducted normal trading sessions on January 20.

“Anticipations surrounding the upcoming budget may drive stock and sector-specific movements. Globally, attention will be directed towards Japan’s monetary policy and the US economic data, with a continued watch on geopolitical developments,” Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

The past week witnessed continued volatility in the market, characterized by Nifty and Sensex ending with a substantial decline of over 1 per cent, exacerbated by Bank Nifty's notable underperformance, primarily attributed to a significant drop in HDFC Bank's shares post earnings, Meena said. The aggressive selling by Foreign Institutional Investors (FIIs) following HDFC Bank's results added further pressure to the overall market, he added. Trading pattern of global oil benchmark Brent crude and rupee-dollar trend would also influence trading in the markets. “Q3 earning season will remain in focus as some major companies will announce their quarterly numbers such as Axis Bank, Bajaj Auto, Canara Bank, Ceat, IOC, Tata Steel, ACC, JSW Steel and many more. The market will also react to domestic and global events, FII (Foreign Institutional Investors), DII (Domestic Institutional Investors) investment patterns, movement of the rupee against the dollar and crude oil prices,” said Arvinder Singh Nanda, Senior Vice President, Master Capital Services.