Indian equity benchmarks ended the Saturday's trade in red terrain as traders remained on sidelines ahead of the interest rate decisions of the Bank of Japan (BoJ) and European Central Bank (ECB), along with US GDP data to be released next week. Key gauges made an optimistic start after Reserve Bank of India (RBI) said India's forex reserves jumped $1.634 billion to $618.937 billion for the week ended January 12. Traders took note of a private report stating that digitization-led formalization has aided the fiscal math through tax buoyancy on one side and reducing wasteful expenditure (subsidy leakage) on the other. Some support also came after Union Minister Smriti Irani, representing India at the 54th Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, highlighted India's progress and commitment to inclusive development under the leadership of Prime Minister Narendra Modi. Irani said In his 10 years of administration, PM Modi made women the centre point of development. This year, leaders from some 300 countries have participated in WEF. However, markets started paring initial gains amid foreign fund outflows. Foreign institutional investors (FIIs) sold shares worth Rs 3,689.68 crore on January 19, provisional data from the NSE showed. Some cautiousness also crept in with report that retail inflation for farm workers and rural labourers increased marginally to 7.71 per cent and 7.46 per cent in December compared to 7.37 per cent and 7.13 per cent, respectively, in November due to higher prices of certain food items. Markets entered into red terrain in last leg of trade and ended with a cut of quarter a percent as traders booked profit ahead of weekend as markets will remain shut on Monday, January 22, after the Maharashtra government announced a holiday that day in connection with the consecration of the Ram Temple in Ayodhya. Finally, the BSE Sensex fell 259.58 points or 0.36% to 71,423.65 and the CNX Nifty was down by 50.60 points or 0.23% to 21,571.80.

The US markets ended higher on Monday on optimism about the outlook for earnings. Intel (INTC), IBM Corp. (IBM) and Netflix (NFLX) among the companies due to release their quarterly results this week. Earnings news from big-name companies like 3M (MMM), General Electric (GE), Johnson & Johnson (JNJ), Procter & Gamble (PG), Verizon (VZ), AT&T (T) and Tesla (TSLA) are also likely to attract attention in the coming days. However, buying interest has waned over the course of the session, as traders look ahead to the release of some key U.S. economic data later this week. On the economic data front, continuing to signal underlying weakness in the U.S. economy, the Conference Board released a report showing a modest decrease by its index of leading U.S. economic indicators in the month of December. The Conference Board said its leading economic index edged down by 0.1 percent in December after falling by 0.5 percent in November. Street had expected the index to decrease by 0.3 percent. The report said the lagging economic index also dipped by 0.2 percent in December following a 0.5 percent increase in November. Meanwhile, the Conference Board said the coincident economic index rose by 0.2 percent in December, matching the uptick seen in the previous month.

Crude oil futures ended sharply higher on Monday amid concerns about possible supply disruptions due to rising tensions in the Middle East, and the extreme cold weather in North America. According to private report, Russian energy firm Novatek has halted operations at its Baltic Sea export terminal due to a fire caused by a drone attack. Benchmark crude oil futures for February delivery rose $1.78 or 2.4 percent to settle at $75.19 a barrel on the New York Mercantile Exchange. Brent crude for March delivery surged $1.50 or 1.90 percent to settle at $80.06 a barrel on London's Intercontinental Exchange.  

Indian rupee ended higher against the U.S. dollar on Friday, tracking robust buying in domestic equity markets and weak American currency overseas. Traders got encouragement after Reserve Bank of India Governor Shaktikanta Das said slowing global growth is reason for concern, a cause of worry but India is better placed to deal with various geopolitical challenges. Meanwhile, the government approved an outlay of Rs 235 crore for revamped Scheme for Administrative Reforms of Department of Administrative Reforms and Public Grievances (DARPG) to be implemented in next two years (2024-25 and 2025-26) of the 15th Finance Commission Cycle. On the global front, the dollar was on track to rise for a second straight week on Friday as signs of resilience in the U.S. economy and pushback from central bankers has caused traders to dial down expectations of swift and sharp falls in interest rates. Finally, the rupee ended at 83.07 (Provisional), stronger by 6 paise from its previous close of 83.13 on Thursday.

The FIIs as per Friday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 15587.05 crore against gross selling of Rs 24781.70 crore, while in the debt segment, the gross purchase was of Rs 1832.01 crore with gross sales of Rs 634.45 crore. Besides, in the hybrid segment, the gross buying was of Rs 33.63 crore against gross selling of Rs 23.29 crore.

The US markets ended higher on Monday amid optimism about the outlook for earnings. Asian markets are trading mostly in green on Tuesday ahead of the Bank of Japan's policy decision, with the central bank expected to keep its main monetary policy settings steady. Indian markets remained range-bound and ended in red on Saturday as volumes remained low due to weekend trading, and lack of global cues. Indian stock exchanges were shut on Monday on the occasion of Pran Pratistha of Ram Temple in Ayodhya. Today, domestic indices are likely to make gap-up opening of holiday shortened week marked with the F&O expiry and the Republic Day holiday. Positive cues from global markets will direct Indian markets. Traders will be taking encouragement as the commerce ministry data showed that India's exports of goods and services rose marginally by 0.4 per cent to $765.6 billion in 2023 despite global economic uncertainties. Sectors which helped keep India's exports afloat include electronics, pharmaceuticals, cotton yarn, fabrics and made-ups; ceramic products, meat, dairy and poultry products, fruits and vegetables and information technology. Some support will come with report that the number of active cases of infections in India stood at 2,059, the lowest national tally in a month, according to the health ministry. On December 20, 2023, the country logged 2,311 cases. Traders may take note of report that negotiations for a free trade agreement between India and the four-nation EFTA bloc are at an advanced stage as both sides have reached a shared understanding on key issues. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland. However, domestic rally may be hampered by global developments where tensions are escalating in the Red Sea area.  The US and the UK have launched a joint air attacks on Houthi positions in Yemen, according to local news reports. Traders may be concerned as Fitch Group said South Asian economies would be most affected, amid rising hostilities in the Red Sea due to Houthi attacks. They will experience the largest relative increase in maritime trade distance, shipping time, and costs as the crucial trade route remains inaccessible. It added that India's economic forecast faces a significant risk in the event of a prolonged spell of disruptions. There may be some cautiousness with report that the number of new formal jobs created in a month has fallen to its lowest level in over two years since the second wave of the Covid-19 pandemic struck, indicating a significant downturn in the formal labour market. The latest monthly payroll data released by the Employees' Provident Fund Organisation (EPFO) showed that in November 2023, the number of new monthly subscribers under the Employees' Provident Fund (EPF) decreased by nearly 10 per cent to 736,015 from 816,721 in October. Auto stocks will be in focus with a private report that the average selling price (ASP) of passenger vehicles (PVs) in India has been increasing steadily over the years thanks to premiumisation, an increase in regulatory stringency, and faster adoption of sports utility vehicles (SUVs). According to data from the industry, the ASP has gone up from Rs 7.65 lakh in 2018-19 to Rs 11.5 lakh in 2023-24, up by over 50 per cent.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Kotak Mahindra Bank has received approval to raise funds by way of issuance of Unsecured, Redeemable, NCDs, on a private placement basis, for an amount up to Rs 10,000 crore, in one or more tranches / series, during FY 2024-25.
• State Bank of India has raised Rs 5000 crore through 5000 Non-convertible, Taxable, Perpetual, Subordinated, Unsecured, Fully Paid-up Basel III compliant Additional Tier 1 Bonds of face value Rs 1 crore each in the nature of debentures at a coupon of 8.34%.
• Tata Steel is planning to commence statutory consultation as part of its plan to transform and restructure its UK business.
• ICICI Bank has reported 25.71% rise in its consolidated net profit at Rs 11,052.60 crore for Q3FY24 as compared to Rs 8,792.42 crore for the same quarter in the previous year.