How do you see the stock markets for Monday 17th January after the strong performance in the previous week?

For the previous week ended on 14th January, Nifty closed with gains of 2.5%. However, the rally was broad-based with the mid-cap index up 2.4% and the small cap index also up by 3%. Sector rotation was evident through the week with IT and financials seeing lot of buying interest through the week and Nifty gaining 11% from recent lows.

Nifty closed flat on Friday with an advance decline ratio of 20:30 in favour of the falling stocks. However, it must be noted that there was a sharp recovery on Friday from lower levels as there was a lot of buying in amidst falling VIX levels. The US Fed turned net liquidity infuser in the last week and that also turned into a positive signal for markets.

Foreign investors net sold Rs.1,598 crore in equities while domestic funds bought Rs.371 crore on Friday. In Jan-22 till date, FPIs were net buyers in equities and hybrids but sellers in debt. On last Friday, there was selling visible in Dow, NASDAQ and other European indices. The SGX Nifty is down about 45 points in early trades on Monday.

There are going to be some important triggers this week as major results come out. But markets will await to see what happens on the LIC IPO front and at a global level, the US Fed liquidity action will be closely watched. Big corporate results are also expected this week including marquee names like Reliance Industries, Bajaj Auto, Bajaj Finance and Ultratech.