Delhi Polls, Inflation Data, and Q3 Earnings: Key Drivers for the Market Next Week!
The market outlook for the upcoming week in February will be influenced by several key factors, including the outcome of the Delhi Assembly elections, macroeconomic data like inflation, and Q3 corporate earnings.
Mumbai: The market outlook for the upcoming week in February will be influenced by several key factors, including the outcome of the Delhi Assembly elections, macroeconomic data like inflation, and Q3 corporate earnings.
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Delhi Polls Results to Impact Market Sentiment
The results of the Delhi Assembly elections are expected to play a significant role in shaping investor sentiment. The Bharatiya Janata Party (BJP) emerged victorious with a strong performance, securing 48 out of 70 seats. Analysts believe this win could contribute to positive market sentiment in the short term, potentially boosting investor confidence.
Key Macroeconomic Data to Watch: Inflation and Industrial Output
Macroeconomic data will also be in focus as inflation and industrial output figures are scheduled to be released on February 12. Analysts predict that January inflation may decrease to 4.69% from the previous month’s 5.22%, which could influence the Reserve Bank of India’s (RBI) future monetary policy decisions.
Meanwhile, industrial production growth is expected to slow to 4.1%, down from 5.2% in the previous month. These economic indicators will provide further insights into the state of the economy, guiding investor sentiment.
Corporate Earnings to Shape Market Trends
Corporate earnings will continue to have a major influence on the stock market. Key companies such as Eicher Motors, Apollo Hospitals, Vodafone Idea, Hindustan Aeronautics, and Muthoot Finance will be announcing their quarterly results this week. Investors will closely monitor these financial performances, as they could have a significant impact on market movements.
FII and DII Activity to Influence Market Flow
Foreign Institutional Investors (FIIs) have been on a selling spree, pulling out Rs 8,852 crore from the market last week. However, Domestic Institutional Investors (DIIs) have helped stabilize the market by investing Rs 6,449 crore, providing support to the market during this period of volatility.
Also Read: Six of the Top 10 Firms Add Rs 1.18 Lakh Crore in Market Value: HDFC Bank Leads
Puneet Singhania, Director at Master Trust Group, noted that despite FII outflows, the Nifty index remained resilient, closing positive for the second consecutive week. Singhania added that the index sustained above the critical 23,450–23,500 zone, indicating a potential bottom reversal and a continuation of the upward trend.
Global Indicators to Influence Market Trends
On the global front, several macroeconomic indicators will be crucial in shaping market movements. The US inflation data for January, due for release on February 12, is expected to show a core inflation rate of 3.2% and a headline inflation rate of 2.9% year-on-year (YoY). Any deviation from these estimates could affect the US Federal Reserve’s upcoming interest rate decisions.
Additionally, the UK GDP data and China’s inflation figures will be closely monitored by global investors as they could have far-reaching effects on market sentiment.
Domestic Market Performance: Positive Momentum
In the last week, the domestic equity benchmarks continued their upward trajectory. The Nifty index advanced by 0.33% to close at 23,559.95, while the BSE Sensex rose by 0.46% to settle at 77,860, reflecting positive momentum despite some short-term volatility.
Conclusion: “Buy on Dips” Strategy in Focus
Despite fluctuations, the market sentiment remains positive, and experts suggest a “Buy on Dips” strategy for investors. With macroeconomic data, earnings reports, and geopolitical factors playing a crucial role in the coming week, investors are advised to stay informed and be prepared for potential market movements.
