Domestic equity market is expected to remain volatile this week as the trading sentiment would be dictated by the first set of October-December quarter earnings from blue-chips including Infosys.

According to analysts, industrial production numbers, due on Friday, may also have some impact on the trading sentiment this week.

Monetary policy review

RBI’s Q3 review of monetary policy for 2013-14 is scheduled on January 28 and higher inflation and weak IIP could force the central bank to increase the base rates at the meeting.

“Third quarterly results for FY’14 and global cues shall be watched closely for market direction. In the coming week, 6,250 shall be the crucial deciding level in the near term for Nifty and the index is likely to witness further buying above this level,” said Rakesh Goyal, Senior Vice-President, Bonanza Portfolio.

Infosys is scheduled to release its earnings on January 10.

Market participants said investments by foreign institutional investors, global cues and movement of rupee against the US dollar will also be key for the stocks.

IIP, inflation data

Industrial output data will be followed by December consumer and wholesale inflation data in the week starting January 13.

“For this week Nifty can show correction as technically it is looking strong on charts. In the coming session, if it manages to cross its resistance level of 6,270, it can test the levels of 6,380 and 6,455,” said Vivek Gupta, Director Research, CapitalVia Global Research Ltd.

According to Milan Bavishi, Head Research, Inventure Growth and Securities: “The period of January-February is seen to be a turning point at several instances in the past. So, it is time to get cautious in the markets. Expect volatility to rise once the New Year holiday mood is over.”

The market ushered in the New Year on a tepid note as the BSE benchmark Sensex dropped 342.25 points last week, the worst performance for the index since the period ended November 8.

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