InvestorQ : What is your stock market view for Monday, 18 January 2021? Do you expect correction to continue or do you see a bounce in the market?
Khushi Patel made post

What is your stock market view for Monday, 18 January 2021? Do you expect correction to continue or do you see a bounce in the market?

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diksha shah answered.
2 months ago
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In the previous week, the Nifty closed just above 14,400 and the Sensex closed just above 49,000. Both the indices faced resistance on Friday and the Sensex lost 570 point while the Nifty lost close to 150 points. You must be prepared for a pre-budget spike in the VIX towards the 28 or even 30 levels as expectations build volatility in the markets.

While Infosys and HCL Tech flattered last week, on Saturday HDFC Bank results were much better than expected. In fact HDFC Bank did better than street expectations in terms of profitability, growth and asset quality. This is expected ot be positive for other banking stocks also as helps to dispel short term concerns in the banking space after the RBI FSR.

There is really no let up in the buying by foreign portfolio investors. FPIs were net buyers to the tune of Rs.971 crore on Friday while DFIs sold Rs.942 crore. The FPIs have bought to Rs.19,000 crore in equities in the first two weeks of January, on top of Rs.130,000 crore infused in November and December. However, FPIs have been sellers in debt in Jan-21.

Over the weekend, the Dow and the NASDAQ closed lower by nearly 90 bps while markets were generally lower across Europe and large parts of Asia too. The SGX Nifty is trading lower in early trades on Monday and the future trajectory would largely depend on the way Asia opens and how the Dow Futures pans out during the day.

An important takeaway has emerged from quarterly results, although it is too early. The big question in 2021 was whether the quarterly performance of Indian corporates would be able to justify the valuations. Till now we have seen that companies have done better in terms of growth and operational profitability and that is a good trend to begin with.

Finally a word of caution for the optimists! As Joe Biden takes charge as the next president of the US on 20 January, there is excitement that he would re-haul relations with China and be liberal on visas. In fact, not much will change at a policy level on both these counts. Appreciating that is important to tone down expectations.
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