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Benchmark indices logged weekly losses but ended the week higher supported by Banks. On the sectoral front, indices gave a mixed performance with PSU bank rising the most becoming the top performer and the FMCG sector declined the most.

On the domestic front, India’s Services PMI performed exceptionally well hitting 6 month high of 61.8 in Jan’23 due to expansion in new business and higher demand from external and domestic clients with new exports rising at the fastest pace. It is expected that the strong demand to continue in 2024 amid better relationships with customers and advertising.
 

Reserve Bank of India (RBI) decided to keep the key policy rate unchanged for the sixth time in a row with the repo rate unchanged at 6.5% as it maintains a tight vigil on inflation. It was expected that the RBI would rate unchanged. By taking this decision, RBI likes to strike a balance between controlling inflation and supporting economic growth. The MPC target is still to keep inflation within the range of 4%. Retail inflation in Dec’23 increased to 5.7% impacted by food price uncertainty. CPI is projected at 5.4% for FY24 and 4.5% in FY25.  The GDP forecast for Q1FY25 raised to 7.2% following the Indian economy's expected growth.
 

On the Global front, the US S&P Global Services PMI was at 52.5 for Jan, as the US economy started the year by experiencing strong growth, new orders rose significantly. US ISM services PMI increased to 53.4 in Jan from 50.5 in Dec, and growth in the service sector picked up as employment rebounded and new orders picked up.
 

In the coming week market will react to the global and domestic economic data, FII/DII investment pattern, crude oil inventories, ongoing quarterly earnings seasons, movement of the rupee against the dollar, trends in the global stock market. Some major economic data that could impact the market are the UK employment rate, inflation numbers, PII input data, GDP numbers, trade balance, US inflation, crude oil, Initial jobless claims, industrial production, Retail sales, building permits, Japan's GDP and industrial production numbers, Eurozone Employment, GDP, industrial production and trade balance data. Domestic economic numbers will also be focused on such as Inflation data, Industrial production, trade balance, forex reserves.
 

The equity benchmark indices were volatile in Friday's trade before recouping sharply from lower levels to end the day in green trajectory amid lackluster cues from global peers. Both midcap and smallcap indices fell 1% each. Nifty prices settled the day at 21782.50, while Sensex ended the week at 71595.49.  
 
 In Nifty, Bears exerted downward pressure on the Nifty from the psychological level at 22000. For Nifty, the next support is at 21,650 and a breach of it can lead to a correction towards 21,400. On the
upside, key hurdles are placed at 22,000-22,100.
 
In Bank Nifty a significant support for the index is identified at 44800, marked by substantial Put writing, sustaining below this level can lead towards 43500. While hurdles are placed at 46000-46200, sustaining above these levels can give a possible move towards 48000 marks. 

 

 

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