Quarterly Earnings, Inflation Data Key Factors Driving Stock Market Trends This Week: Analysts

WPI inflation data, ongoing quarterly earnings and foreign fund trading activity should largely shape stock market conditions this week, analysts said.

Global trends and the movement of Brent crude oil are also critical factors to watch, they added.

“The third quarter of the season has started with big IT names and this week we will comment on the earnings of some big names, including HDFC Bank, IndusInd Bank, Asian Paints, JSW Steel and HUL.

Globally, the US market will remain closed on Monday due to Martin Luther King Jr Day. However, we will get a lot of macro data from the US, Europe and China. Aside from this, crude oil price volatility, US bond yields and the dollar index will be other important factors,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

HDFC Bank on Saturday reported a 19.9 percent increase in its net profit to Rs 12,698 crore for the third quarter ending December 2022, aided by a healthy increase in core income.

Going forward, earnings and global signals will largely drive the trend. On a macroeconomic front, we have scheduled Wholesale Price Index (WPI) inflation data for January 16. In terms of earnings, banking stocks will be largely in the spotlight. First, the markets will react to HDFC Bank’s number. In the following sessions, participants will monitor the results of IndusInd Bank, Kotak Bank and ICICI Bank,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.

Last week, the 30-stock BSE benchmark climbed 360.81 points, or 0.60 percent.

On the trend over the past week, Meena said, selling by foreign institutional investors (FII), where they sold shares for around Rs 10,000 crore, was the highlight of the week. FII fund inflows are a critical variable in determining the future direction of the market, he added.

Other key earnings this week come from Federal Bank, Bank of India and Union Bank of India.

“Going forward, with IT revenues out of the way, investors will now focus on financial institution revenues,” said Vinod Nair, Head of Research at Geojit Financial Services.

Wipro Ltd on Friday posted a 2.8 percent year-on-year increase in its consolidated net profit for the December quarter at around Rs 3,053 crore. Shares of Wipro are also in the spotlight on Monday.