Trends on SGX Nifty indicate a gap-up opening for the broader index in India. Indian markets could open higher in line with most Asian markets today and positive US markets on Friday, said Deepak Jasani, Head-Retail, HDFC Securities.
Prashanth Tapse, Vice President (Research) at Mehta Equities Ltd, said, "Markets are likely to roar back to life, thanks to Wall Street’s Friday’s raucous Apple inspired rally. Having said that despite today's improvements, January is likely to finish as a downright lousy month for Indian equities due to negative catalysts such as hawkish Fed's near-term rate hikes followed by a reduction of its $9 trillion balance sheet and selling by the FII camp. All eyes will now be on the GDP numbers and the Union Budget to be announced on February 1. Nifty’s daily charts are still painting a bearish picture; downside risk seen at 16836 mark and then aggressive targets at December 2021 lows at 16,410. So, on the downside, the benchmark Nifty needs to hold above 16,410 mark for any meaningful recovery. Confirmation of strength only above Nifty 17-407 mark."
Nifty gave up early gains on January 28 to close almost flat. At close Nifty was down 0.05 percent or 8.2 points at 17,101.9. In the process Nifty has fallen in 7 out of past 8 sessions.
Nifty closed the week, lower by 2.92 percent recording the second worst week in 2022. It has fallen sharply in the past two weeks due to relentless FPI selling. This seems to be more global phenomenon than pertaining to just India. This week will continue to be volatile with the Union Budget to be presented on Tuesday. 16,998- 17,374 could be the band in the near term while this band could widen on and post the Budget day next week. Whether the FPI selling halts or not will depend on their views on global equities and whether the Indian Budget is exciting enough for them to reverse their stand on India. Sectorally Banks, PSU, Auto, Oil & Gas and Power indices look better than others suggesting some expectation buildup in these ahead of the Budget.
US stocks rally
US stocks rallied on Friday as investors turned their eyes toward corporate earnings and ignored geopolitical turmoil and Federal Reserve tightening concerns. U.S. stocks on Friday finished on a decidedly higher note, booking sharp gains in a final swing higher in the last hour of trading, which helped to erase sharp weekly declines and snap multiweek losing streaks for all of the major benchmarks. For the week, the Dow booked a gain of 1.0 percent, the S&P 500 index climbed 1.3 percent, the Nasdaq Composite finished up 0.01 percent higher, but the Russell 2000 still finished down 1 percent for the week.
The gains came mostly in the final hour of trading, which has turned into a new witching hour on the Street and came as investors parsed fresh USeconomic data and upbeat earnings from Apple as promising.
Asian stocks positive
Asian stocks were in positive territory Monday even after a Federal Reserve official flagged the possibility of sharper interest-rate increases and Chinese data signaled slower economic growth. Mainland China and South Korea markets are closed for the Lunar New Year eve.
US consumer spending declines in December
Reports showed US consumer spending falling 0.6 percent in December, amid a wave of COVID-19 cases from the highly contagious omicron variant of coronavirus. Meanwhile, a measure of US inflation preferred by the Federal Reserve climbed 5.8 percent in 2021 after another increase in December. Employment costs rose 1 percent in the fourth quarter. Separately, a reading of consumer sentiment slumped to a 10-year low as inflation concerns mount, underscoring the waning appetite for assets perceived as risky.
Argentine assets jump after IMF agreement
Argentine assets jumped after the country reached an agreement with the International Monetary Fund to revamp some $40 billion in debt it cannot pay back. Colombia's peso edged 0.1 percent higher after the country's central bank board raised its benchmark interest rate by 100 basis points to 4%, the biggest monthly increase in decades as the bank tries to counter inflationary pressures.
China manufacturing expands
China’s manufacturing sector expanded at a slower pace in January as a seasonal slowdown, COVID-19 outbreaks and a housing market drop dragged activity at small firms to the weakest since the depth of the pandemic. The official manufacturing purchasing managers’ index declined to 50.1, just above the median estimate of 50. The non-manufacturing gauge which measures activity in the construction and services sectors, fell to 51.1, also marginally above the consensus forecast. The Caixin Manufacturing Purchasing Managers’ Index, also released on Sunday, fell to 49.1, the worst in almost two years.
