The week ahead: Q3 earnings to dictate the trend.

The Indian benchmark indices – the Sensex and the nifty – ended last week at 34154 and 10558 thanks to positive cues in the domestic front and global economies, especially US. There was renewed buying interest from the FIIs and we could observe that the positive mood created in the markets were reflected in the broader segments as well – the small and mid-cap segments too performed with the BSE mid and small cap indices rising .60% and .97% respectively.

Going ahead the markets will be focusing on two critical events – the on-going Q3 results season and the budget scheduled on Feb 01 2018. The Feb 01 budget would be the last full-fledged budget from the government ahead of the next year elections and hence, it is likely to be a populist budget. The expectations of the market participants can result in volatility and stock specific actions in the next couple of weeks.

Another critical factor that is to be watched is the crude oil price which is at USD 68 per barrel now. The oil has reached this level after a long gap of 2 and half years. Oil price experts are of the opinion that crude can touch USD 70 in the days to come. This is risky for the Indian markets since it will widen the fiscal deficit.

So overall , the three factors that’s going to dictate the markets trends are the budget expectations , Q3 results and crude oil prices. For the week ahead a trading range of 33600-34500 is expected for the Sensex and 10370-10700 for the nifty.

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