Indian Stock Market Sees Modest Close; Eyes on Q3 Earnings and Global Factors in the Week Ahead

Indian Stock Market Sees Modest Close; Eyes on Q3 Earnings and Global Factors in the Week Ahead

Asif Iqbal | January 7, 2024 | 10:08 AM IST | India | Follow on Google News

Indian Stock Market Sees Modest Close; Eyes on Q3 Earnings and Global Factors in the Week Ahead.image/ISM

Indian Stock Market Sees Modest Close; Eyes on Q3 Earnings and Global Factors in the Week Ahead

The Indian stock market closed without significant changes in the week ending on Friday, January 5. Looking ahead to the second week of January, the market is expected to be influenced by various factors, including the commencement of the third-quarter earnings season, inflation data, and specific triggers impacting individual stocks.

On Friday, both key equity indices, the Sensex and the Nifty 50, saw gains for the second consecutive session. The Sensex closed 179 points higher at 72,026.15, a 0.25% increase, while the Nifty50 settled at 21,710.80, up 52 points or 0.24%.

The broader market showed strong performance for the second straight week, with the Nifty Midcap 100 gaining 2.5% and the Nifty Smallcap 100 increasing by 1.9%. However, analysts advise caution due to uncertainties in the Red Sea region and the upcoming results season.

The market ended on a flat note, tracking weak global cues, with a cautious approach from investors due to the US 10-year yield rising and anticipation of US payroll data release, influencing expectations for the Fed policy. Concerns about eurozone inflation also contributed to the cautious sentiment.

As the third-quarter results season kicks off, around 65 companies are scheduled to unveil their results from January 8 to January 13. Key companies such as TCS, Infosys, HCL Tech, Wipro, and HDFC Life Insurance will announce their financial results.

Analysts project subdued performances from IT firms during this season, citing factors like prolonged higher inflation, delays in discretionary projects, and overall sluggish growth. The Red Sea crisis, with Houthi rebels targeting commercial ships, adds another layer of concern, potentially impacting trade and increasing shipping costs and insurance premiums.

Despite these challenges, the SME IPO arena remains active, with upcoming listings and IPOs of various companies. The year 2023 was eventful for the Indian primary market, and the momentum is expected to continue in 2024, with numerous companies planning IPOs to raise substantial funds.

During the initial trading week of the year, foreign institutional investors (FIIs) took a positive stance by purchasing equities, while domestic institutional investors (DIIs) were net sellers. This FII inflow aligns with the trend observed in the last two months of 2023, where foreign investors re-entered the market due to a drop in US bond yields and a weakening dollar.

The sharp market upswing in December coincided with a significant surge in FPI inflows, reaching ₹66,134 crores. The positive FPI flows in December and the last two months of 2023 contributed to a turnaround from negative flows in the preceding months. Analysts anticipate continued FPI purchases in 2024, particularly in large-caps, with potential acceleration in FPI inflows into debt.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted FPIs’ increased buying in financial services, IT, autos, capital goods, oil and gas, and telecom in December. He expects FPI inflows to support the uptrend in the main benchmark indices in 2024, with a focus on large-caps, especially in the lead-up to the General elections.

Indian Stock Market Sees Modest Close; Eyes on Q3 Earnings and Global Factors in the Week Ahead:In case of rectification of any error in article , Visit on Correction Policy & Register your Query:

Asif Iqbal

Asif Iqbal is a seasoned news writer with a passion for delivering the latest updates to the public. Currently serving as the senior writer at VoM News, a prominent news outlet known for its comprehensive coverage of diverse topics, Asif has established himself as a reliable source of information. With a keen eye for detail and a knack for storytelling, he consistently provides readers with well-crafted articles that cover a wide range of news categories. His dedication to journalistic integrity and his commitment to staying ahead of the news curve make him an invaluable asset to Vom News, ensuring that readers are always well-informed on the issues that matter most. You can find his work and stay updated on current events by visiting vomnews.in.