Macroeconomic data, IPOs and the Federal Reserves's policy will be in focus on Dalal Street this week. News flow on the new COVID-19 variant, Omicron, will also be tracked closely.

Share Market Live

NSE

Indian equity benchmarks Sensex and Nifty50 clocked second straight weekly gains. For the week ended December 10, the Sensex and the Nifty rose nearly two percent each to close at 58,786.7 and 17,511.3 respectively, amid gains across most sectors. The midcap and smallcap indices surged around 3-4 percent.

What to expect this week

Domestic inflation data and the Federal Open Market Committee's meeting will be crucial events for the Street this week, according to Yesha Shah, Head of Equity Research at Samco Securities. All eyes will be on the stand the FOMC adopts on tapering and its interest rates trajectory, she said.

"While it is widely expected that the Fed will consider the intensity of the Omicron variant before aggressively bringing forward its tapering plans, any surprises in the announcements can cause choppy movements. Investors should remain cautious and consider value investing till the market continues to let off steam from excess valuations," Shah said.

Most analysts felt the RBI's policy last week was more dovish than expected. The central bank held the key interest rates and decided to continue with its existing 'accommodative' stance of policy. Governor Shaktikanta Das promised continued support for the economy amid concerns about the Omicron.

"Though the fear about the new COVID variant has subsided, we are still seeing volatility across the globe and expect the trend to continue this week... Going ahead, we feel the recovery would remain uneven, and recommend continuing with a positive yet cautious approach," said Ajit Mishra, VP Research at Religare Broking.

He expects the Nifty to face resistance around 17,600 and 17,800 and find support in the 17,300-17,150 zone in case of any dip.

Technical outlook

Yesha Shah, Head of Equity Research at Samco Securities, sees limited upside in in the Nifty50 in the short term, as the index continues to trade below the major rising trend line.

"The index is facing resistance around 17,550 and is currently trading around its 20-day moving average. The last two trading sessions exhibited indecisiveness.... Similarly, the Bank Nifty is also struggling to surpass resistance at 37,440," she said, advising traders to maintain a neutral to mildly bearish outlook till the Nifty50 holds above 17,550.

Here are the key factors and events that are likely to influence Dalal Street in the week starting December 13:

DOMESTIC CUES

Macroeconomic data

Official data on consumer inflation in India will be released on Monday evening, and on wholesale inflation the next day during market hours.

Monthly trade numbers will be out on Wednesday.

IPOs

Bidding for MapmyIndia's IPO will end on Monday, and Metro Brands' on Tuesday. Tega Industries' shares will list on stock exchanges BSE and NSE on Monday.

Three new IPOs will hit the Street this week: Medplus Health, Data Patterns and HP Adhesive.

FII flow

Foreign fund flow will be in focus once again. Last week, foreign institutional investors net purchased Indian equities worth Rs 838.3 crore ($106.8 million). However, they remain net sellers for the month so far.

ALSO READ: FIIs net sellers in Indian shares, Dec could be 3rd month of outflows

Corporate action

GLOBAL CUES

United States

The Federal Reserve's scheduled policy review will be in focus this week. The decision on interest rates and the US central bank's commentary on Thursday will be in the spotlight.

PMI surveys on manufacturing and services will be released later that day.

Monthly retail sales data is due on Wednesday.

Europe

The United Kingdom will release monthly numbers on unemployment on Tuesday. Data on inflation is due on Wednesday, and on retail sales on Friday.

The Bank of England's decision on the key interest rates is scheduled for Thursday.

Asia

Data on industrial production and retail sales in China is due on Wednesday.

The Bank of Japan is slated to announce its decision on key rates on Friday.

First Published:Dec 12, 2021 2:12 PM IST