Quarterly results, sales and shipments data from automobile and cement manufacturers and the trend in global stock exchanges will provide direction for investors on the Indian bourses in the coming week. The rupee's performance against the U.S. dollar will be eyed as well.
After the Reserve Bank of India announced a surprise repo rate hike and the U.S. Federal Reserve reduced its asset purchases by $10 billion dollar a month, the market saw some weak spells last week, resulting in the key indices Sensex and Nifty losing close to 3%.
Following the sharp correction, stocks may see some upside next week as investors are likely to indulge in some bargain hunting. However, a strong and sustained rise may remain elusive due to concerns about near term economic outlook.
In economic news, the data on the country's manufacturing sector activity in January will be out on Monday (3 February), with Markit Economics unveiling HSBC Manufacturing PMI. A couple of days later, Markit Economics will come out with its report on the services sector activity in January 2014. Both these indices had showed a notable decline in the previous month.
On the results front, BHEL, Lupin, Power Grid Corporation, Ranbaxy Laboratories, Ambuja Cements, ACC, Bank of Baroda and Tata Power will announce their quarterly earnings reports during the week.
Weak earnings reports from a few top notch companies had resulted in a negative close on Wall Street last Friday. While the Dow Jones Industrial Average lost nearly a percent, the Nasdaq composite index ended lower by about 0.5%. This could set up a weak and subdued start for Asian markets on Monday, and the mood back home is unlikely to by any significantly different at the start.
Automobile and cement stocks will be in focus, with January sales and shipments data setting the trend. Telecom stocks are likely to see action on Monday following the government putting up 403 units of airwaves in 1800 Mhz band for spectrum auction.
The rupee's movements will provide direction to information technology stocks. Since the Chinese markets will be closed during the week for Lunar New Year holidays, metal stocks may remain a bit listless for most part of the week.