Q3 Earnings, Global Trends To Guide Market This Week; Equities May Face Volatility Amid F&O Expiry: Analysts

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Trading in the equity market in the holiday-shortened week ahead will be largely guided by the ongoing quarterly earnings, global trends and foreign fund movement, analysts said.

Dalal Street also may face volatility amid monthly derivatives expiry, they added.

“This week will be a shortened week because the market will be closed on Thursday in honour of Republic Day; thus, the January month F&O expiry is scheduled for Wednesday, which may cause market volatility. 

“Global cues are also volatile and lack direction, but any major swing in the global market may also impact our markets. FIIs’ selling has slowed down in the last few days following aggressive selling in the first half of this month, but institutional flows will remain crucial for the direction of the market. Q3 earning season is going on, therefore stock and sector-specific moves will continue,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

On the quarterly results front, Axis Bank, Maruti Suzuki India, Bajaj Auto, DLF, Tata Motors, Bajaj Finance and Vedanta will announce their earnings this week.

“Market is likely to remain in a consolidative range with stock-specific action on Q3 FY23 results and upcoming Budget,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Investors would also track trading activity of Foreign Institutional Investors (FIIs), movement of rupee and Brent crude oil. 

Vinod Nair, Head of Research at Geojit Financial Services, said, “Although we started the third quarter on a shaky note, the latest set of financial announcements from IT and banking blue chips are encouraging. Given the mixed undercurrents, the second line of Q3 and global market cues will determine the trend going forward.”

Subdued Q3 results, soft Budget expectations, FII selling and concerns over global interest rate hikes defined the market in the past week, analysts said.

Last week, the 30-share BSE benchmark Sensex climbed 360.59 points or 0.59 per cent.

“Markets will first react to the important results like Reliance, ICICI Bank and Kotak Bank in early trade on Monday,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.