Q3 earnings, F&O expiry among 8 factors that can steer market next week

NEW DELHI: Fireworks continued on Dalal Street last week, and the domestic equity market settled at yet another peak on Friday, logging gains for the seventh straight week.

The government’s decision to reduce additional borrowing by 60 per cent, coupled with speculation about 100 per cent FDI in private banks, better-than-expected results of India Inc and firm global cues helped the bulls smash one record after another through the week.

On Friday, the S&P BSE Sensex added 251 points to close at 35,511 while the broader Nifty50 of the National Stock Exchange (NSE) briefly touched the 10,900 mark before settling at 10,894.

On a weekly basis (Jan 15-19), the 30-share pack added 668 points, or nearly 2 per cent, while the Nifty50 gained 153 points, or 1.42 per cent.
Here’s a look at the top events/factors that may influence market in the coming week:

Next set of Q3 earnings
Next batch of quarterly results will be unveiled in the coming week. Among prominent names, Asian Paints and Axis Bank will release their Q3 numbers on Monday, January 22, Indiabulls Housing Finance will report its results on Tuesday, January 23. Dr Reddy's Laboratories and Maruti Suzuki India on Thursday, January 25.

Countdown to Union Budget
Some jitters and nervousness may creep in as the countdown to the Union Budget begins. The Budget Session of Parliament is set to commence on January 29 and the Budget for 2018-2019 will be presented on February 1. President Ram Nath Kovind will address the joint sitting of the two Houses on January 29 and the Economic Survey will be tabled on the same day.

New kids on the block
Newgen Software and Amber Enterprises India are likely to list on bourses next week. Both the companies concluded their IPOs (initial public offerings) during the week gone by. While Newgen was overall subscribed 8.25 times, Amber issue saw 165.42 times subscription.

ONGC to buy govt stake in HPCL
In a major development, Oil and Natural Gas (ONGC) agreed to acquire the government’s entire 51.11% stake in Hindustan Petroleum (HPCL) for about Rs 37,000 crore in an all-cash deal that would close by the month end. The stocks are likely to react to it when trading resumes on Monday.

F&O expiry to add volatility
Trading could be volatile next week as traders roll over positions in the futures & options (F&O) segment from the near-month January series to February series. The January 2018 derivatives contract expires on Thursday, 25 January 2018.

Tech charts show rally to continue
The Nifty50 formed a strong bullish candle on the daily as well as weekly charts. The index managed to close above the upper Bollinger Bands on both daily and weekly charts. Bollinger Bands are a highly popular technical analysis technique developed by famous technical trader John Bollinger. This shows great possibility of the uptrend continuing, but the overbought nature of the lead indicators will require market participants to remain vigilant at higher levels, said Milan Vaishnav, Technical Analyst, Gemstone Equity Research and Advisory.

US govt shutdown
Markets across the globe, including India, may see some volatility on the shutdown of the US government. US President Donald Trump and the US Congress failed to meet a Friday midnight deadline to pass a short-term bill to extend federal funding, forcing some government facilities to shut down. In shutdowns, non-essential government employees are furloughed, or placed on temporary unpaid leave. Workers deemed essential, including those dealing with public safety and national security, keep working, said Reuters.

Global cues to watch
The Bank of Japan (BoJ) is scheduled to announce its monetary policy decision on Tuesday, January 23. The central bank is widely expected to keep the rates unchanged, however, the discussion could be interesting, given the shifting sands in central banking, say media reports. This apart, European Central Bank's (ECB) monetary policy statement and press conference is slated on Thursday, January 25.