Can you share your view on the markets after the Sensex touched 50,000 and came back. How do you see the outlook for Friday 22 January 2021?

On 21 January, the Sensex scaled above 50,000 for the first time ever and even crossed 50,100 briefly. However, the pressure of traders was very high at these elevated levels and eventually the markets closed over 300 points short of the mark. Finally, the Sensex may have closed 167 points lower but the volatility was very high.

Quarterly season was mixed as far as Thursday was concerned. In terms of quarterly results, Bajaj Auto flattered the street with some excellent export numbers and record sales revenues. Similarly, Asian Paints showed solid growth. Certain companies like Bandhan Bank showed asset stress while Biocon profits weakened on sharply higher costs.

It must be said that foreign investors have kept their faith in the Indian markets despite the volatility. FPIs were net buyers of Rs.1615 crore while DFIs sold Rs.1039 crore on Thursday. On the first day itself, Biden left a mark and promised to ease world tensions substantially. The next few days would be important for the risk-on flows into EMs.

Global markets were relatively more tepid on Thursday. While the NASDAQ continued to be buoyant, most of the other European markets were under pressure as was the Dow Jones index. The SGX Nifty is also trading flat to negative in early trades and it could face the typical Friday blues when traders try to lighten positions ahead of a weekend.

To sum it up, the Sensex and Nifty are poised at crucial levels. Actually, the important level for the Sensex is 51,000, which roughly corresponds with 15,000 on the Nifty. The markets will have to take out both these levels with volumes. For that to happen big results like RIL, ICICI Bank and SBI must give positive signals and the VIX must come down below 20.