Weekly Note – Markets week ahead: Q3 earnings, budget will guide the markets ahead

India’s benchmark indices witnessed little action in the week gone by despite the signing of Phase 1 of the Sino-US trade deal and some major corporate earnings.

In the coming week, the indices will continue to take a lead from quarterly earnings and countdown to the Union Budget.

Investors will also track further developments on the AGR issue as the date for the payment draws near.

Marketmen will be tracking foreign investment flows, which topped the Rs 10,000 crore mark last week.

Foreign institutional investors (FIIs) bought equities worth Rs 1,790.6 crore, while Domestic Institutional Investors (DIIs) sold equities worth Rs 2,620.48 crore.

The Indian rupee ended 25 paise lower at 71.33  on January 24 against its January 17 closing of 71.08.

The market expectations remain anchored by the strong Q3 to push earnings growth for FY20 and FY21.

Markets are hoping for stimulus measures from the government in the Budget.

These two factors will jointly determine the market movement in the coming days.

On the global front, investors will continue to observe caution following the outbreak of deadly coronavirus.

The virus has killed 25 people in China and infected more than 800, the government said on January 24, as the World Health Organisation (WHO) declared it an emergency but stopped short of declaring the epidemic of international concern.

Net net the market will continue to remain volatile with a lot of stock-specific activity expected with Q3 numbers dominating the week.
Saturday will be a full working day for the markets as this will coincide with the union budget presented by the FM and markets are clearly hopeful of some positive economic measures announced by the govt for the capital markets and individual taxpayers in particular.

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