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Below is the Weekly  Market Note Analysis 15 January 2022 By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets traded buoyant for the fourth straight week and gained nearly 2.5%. The mood was upbeat from the beginning, thanks to favourable global cues and results of IT majors further boosted sentiment. Though some profit taking was witnessed in the final sessions, rotational buying across sectors capped the downside. Eventually, both the Nifty and Sensex ended around the week’s high to close at 18,255 and 61,223 levels respectively. All the sectoral indices participated in the move wherein capital goods, realty and auto were the top gainers. The broader indices outshined the benchmark and gained in the range of 2.8%-3.6%.

The earnings season is off to a good start wherein IT major TCS and Infosys reported a strong set of numbers. Wipro and Mindtree too posted inline numbers in Q3FY22. The commentary on future demand outlook continued to remain positive from most companies. On the macro front, both IIP and CPI numbers were announced during the week. The IIP slowed to 1.4% YoY whereas CPI rose to a five-month high coming in at 5.59%.

The earnings season would gain pace next week and participants will be closely eyeing the results of some of the top names like Reliance, ICICI Bank, Ultratech Cement, Bajaj Auto, JSW Steel, Bajaj Finance, Asian Paints, Hindustan Unilever among others. Before that, markets will first react to the earnings of two heavyweights- HCL Technologies and HDFC Bank in early trade on Monday.

Among the other events and data, expectations around the Union Budget have started triggering noticeable moves across the board.  Amid all, global cues and updates on the COVID situation are also on the market’s radar.

Markets have made remarkable progress in the last one month and now inching closer to a record high. While we have mixed indications from the global markets, we believe earnings would dictate the market trend ahead. On the index front, a move above 18,350 would pave the way for a new record high while 17,950-17,700 levels would act as a support in case of any profit taking. We recommend maintaining focus on sectors/themes which are playing out well and using intermediate correction to create long positions. Though the participation is broad-based, metal, IT, realty and pharma may outshine in the coming week.

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