In the coming week, traders would be awaiting the Reserve Bank of India’s (RBI) monetary policy statement for the current financial year (2022-23), which will be announced on February 8. Dalal street expects the central bank to hike the repo rate once again. The two-day meeting will start on February 6. On the economic front, market participants would be eyeing the data of the Index of Industrial Production (IIP) for December, which is scheduled to be released on February 10.
India's industrial production jumped 7.1 per cent from a year earlier in November of 2022, the most in five months. On the same day, deposit growth, bank loan growth, and Foreign Exchange Reserves data will also be released.
Key Results: As a result-heavy season, lots of companies including Tata Steel, Adani Transmission, Balaji Amines, Bal Pharma, Deep Industries, Easy Trip Planners, JK Paper, Adani Ports, Ambuja Cements, Bharti Airtel, Hero Motocorp, NHPC, V-Mart Retail, Adani Power, Shree Cements, Trent, Aurobindo Pharma, Hindalco, IRCTC, Lupin, Natco Pharma, Page Industries, ABB India, BHEL, Glenmark, JM Financial, M&M, NBCC (India), Oil India, PB Fintech, will be announcing their numbers.
US market data: On the global front, investors will be eyeing macro-economic reports from the world’s largest economy the US, starting with Balance of Trade, Redbook on February 7, followed by API Crude Oil Stock Change, Wholesale Inventories, EIA Crude Oil Stocks Change on February 8, Initial Jobless Claims on February 9, Michigan Consumer Sentiment, Baker Hughes Oil Rig on February 10, and Monthly Budget Statement on February 11.
Technical Outlook: Nifty
Commenting on the markets in the coming week, Nagaraj Shetti, Technical Research Analyst at HDFC Securities, said: "Nifty as per weekly chart formed a long bull candle with upper and lower shadow. The Nifty on the weekly chart closed at the edge of the previous downside breakout point of the larger sideways range at 17800 levels."
"Technically, this pattern signals a false downside breakout of the range and this is likely to open the doors of the upside pattern target of around 18250 levels (upper end of the range) in the near term. The short-term trend of Nifty continues to be positive. The upside breakout of crucial resistance at 17800 levels suggests an upside target for Nifty around 18250 levels in the next 1 or 2 weeks. Immediate support is at 17650 levels."
Anindya Banerjee, VP - of currency Derivatives & Interest Rate Derivatives at Kotak Securities, said. "USDINR spot closed 35 paise lower at 81.82, as sentiment improved in the local and heavy intervention was suspected. Over the next week, we could see USDINR trade within a broad range of 81.50 and 82.20 levels. A key event will be the RBI monetary policy, where RBI is expected to raise rates by 25 bps."
Banking Sector Expectations
Hemali Dhame, Associate Vice-President Research at Kotak Securities, said the capex will surely lead to credit demand. "Coupled with the current health of the bank's balance sheet, it is highly positive. Insurance will see a structural readjustment. There is likely to be some realignment of insurance products to revised tax plans of customers. There is likely to be a shift in attractiveness to banks in BFSI. The Government and the RBI are looking for affordable customer experience in banking and hence scale shall be important,” Dhame said.
Real estate sector
Pankaj Kumar, Deputy Vice President -Fundamental Research, Kotak Securities Ltd, said the recent Budget has emphasised on promotion of tourism and the setup of Unity malls by states which are positive for hotels and malls players. "But the proposal to tax part of distributed income by the business trust was negative for REITs. Part of the distribution from REITs (in the form of repayment of capital) was not taxable earlier, but the same would now be taxable. In addition, the budget introduced a cap on deduction from capital gains on investment in residential houses under sections 54 and 54F at Rs10 cr. This would work against investment in properties as well as investor demand."
Industrial & Infrastructure sector
Kumar further said that FY24 Union Budget focused on sustainable economic recovery through infrastructure creation. The government maintained its focus on capital expenditure with a budgeted growth of 37 per cent in FY24 BE (Budget Estimates) to Rs10 lakh crore from FY23 RE (Revised Estimates) of Rs 7.3 lakh crore. "The bulk of the increase continues to be from railways (51 per cent growth), roads and highways (25 per cent growth), and defense (growth of 8.5 per cent), etc. Increased thrust on railways, roads, urban investment, renewable, bio energy (CBG), etc. bodes well for the industrial and infrastructure sector," he added.
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