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NEW DELHI: December quarter earnings of heavyweights, including Kotak Mahindra Bank, ITC, YES Bank and Maruti Suzuki India, remained most dominant themes for the domestic stock mark et during the week gone by.
Global cues and crude oil’s volatility also influenced mood, but not as much as the third-quarter numbers that swung the market.
Last week, Sensex slipped 361 points or 1 per cent, while Nifty suffered a loss of 126 points or 1.16 per cent.
Volatile is likely to remain high next week, as market will try to take the Vote on Account and the expiry of January series of futures and options contracts in its stride.
Let's take a look at the key factors that will influence market mood this week:Budget 2019: The government will present Vote on Account on February 1, which will be only for three months before the new government presents a full-fledged budget in July.
Experts are expecting some populist moves by the government, especially for rural and agri-based sectors, in the run-up to Lok Sabha elections.
While this may be the last opportunity for the NDA government to woo a bigger section of society facing agri challenges, it will have to show prudence to stick to fiscal consolidation target.
What may bother the market is slippage in fiscal targets.
In a report, Bank of America Merrill Lynch said that the government is set to breach the fiscal deficit target yet again by 40 bps for 2018-19, and raise the target to 3.5 per cent for next fiscal.
FO expiry: The domestic stock market may have to endure bouts of volatility as January series futures options contracts expire on Thursday, and investors roll over positions to the February series.
Nifty futures closed in the negative at 10,788 with a 0.74 per cent loss on Friday.
On the options front, maximum Put open interest was at strike price 10,800 followed by 10,700 while maximum Call OI was at 11,000 followed by 10,900 levels.
Meaningful Call writing was seen at 10,800 followed by 10,900 levels, while Put unwinding was seen at all immediate strike prices.
The option band signified a lower trading range between 10,700 and 10,900 levels.
Q3 earnings: Third-quarter numbers of major firms, including Escorts, Axis Bank, Bank of Baroda, Bajaj Finance, Bajaj Finserv, HDFC, HCL Technologies, Bharti Airtel, Hero MotoCorp, Bajaj Auto, ICICI Bank and State Bank of India, are expected this week.
Their numbers can boost or dent market mood.
US Fed meet: The US Federal Reserve will hold its first monetary policy meet of 2019 on January 29-30.
Markets across the world will closely follow whether the Fed walks the talk and an era of milder Fed rate regime begins.
While the central bank forecast two more hikes for 2019, the darkening global economic outlook, convulsing stock markets and a record-long government shutdown are clouding the policy picture, Reuters reported.
The macro meter: Important domestic as well global macro prints are slated to be released this week.
India's fiscal deficit numbers and infrastructure output numbers for the month of December will be out on Thursday, while January Nikkei Markit Manufacturing PMI will be released on Friday.
Among the global economies, China's Caixin Manufacturing PMI data for January, US Nonfarm Payrolls data and US ISM Manufacturing PMI data for January are the important ones, markets will take note.
US-China trade talks: The next round of trade talks between the US and China are scheduled to take place on Wednesday and Thursday.
Markets have not given up hopes of an amicable deal between the two largest economies of the world.
The hope became stronger after the US Commerce Secretary Wilbur Ross said there was a fair chance of a deal despite great differences between the two parties.
Brexit vote: Britain's exit from the European Union (EU) is turning chaotic day by day.
The British lawmakers rejected Prime Minister Theresa May’s Brexit deal just a week ago, and now they will debate her proposed next Brexit moves on January 29.
The British Parliament will also discuss alternative plans put forward by lawmakers, including some that seek to delay Britain’s March 29 exit from the EU.
Greater focus will be on averting a no-deal Brexit - a scenario in which the UK crashes out of the EU with no trade agreement, Reuters reported.
Global sentiment: Tech giants Apple and Microsoft will release their earnings this week.
In the wake of uninspiring numbers from tech majors across the globe, the numbers of these two company's will either darken the gloom or scatter the ray of hope in markets.
Crude oil: Oil prices rose on Friday on concerns that the political turmoil in Venezuela may tighten the supply in the market.
The opposition leader of Venezuela Juan Guaido has declared himself interim head of state and has got backing from many countries, including the United States, Canada and Brazil.
The political impasse in the Latin American country may disturb the oil supply, pushing the crude prices higher.
Technical outlook: Nifty's Friday session signalled that the bears have tightened their grip and some more weakness is in the offing as the index formed a large bearish candle on the daily chart.
Nagaraj Shetti of HDFC Securities believes the key resistance level of 10,850 is proving too big a hurdle for Nifty50 to take out.
The near-term trend looks weak and the 10,700-680 range will be the next downside support to watch out for, he said.
