Stock Market Prediction Next Week (23- 27 Jan 2023)
Stock Market Prediction Next Week (23- 27 Jan 2023): Indian stock markets gained for the second straight week that ended on 20 January. The equity benchmarks, Sensex and Nifty closed higher by 0.60 percent and 0.40 percent respectively during the week. The markets ended higher with the support of positive cues from Asian markets. The upside remained capped due to FIIs outflows, mixed corporate earnings, and fear of aggressive rate hikes and recession worries in the US.
The coming weak will be a truncated one as Indian markets will remain closed on Thursday 26 January on account of Republic Day. Next week market will focus on the monthly F&O expiry, quarterly earnings, and the US GDP number. The other key factors that are likely to impact the stock market prediction next week are given below.
Stock Market Prediction Next Week (23-27 Jan 2023)
Monthly F&O Expiry: Nifty & Bank Nifty weekly prediction
The Nifty index after opening slightly on a weaker note near the 18100 level on Friday, traded in a tight range in the entire session and closed near the 18000 level to witness a lackluster day. The Nifty index is moving in and around the significant 50EMA levels of the 18100 zone. It needs to breach the near-term resistance zone of the 18250 level which is very crucial for further upward movement. On a weekly basis, the Nifty index (on spot level basis) could trade in a range of 18300-17800
Bank nifty also witnessed a very narrow sideways movement in the last trading session of the week. It was hovering near the 42300 level, with most of the frontline banking stocks remaining stagnant. Further, the Banknifty index needs to breach decisively the zone of 42700-42600 levels for a breakout and upward movement. Bank Nifty (on spot level basis) would trade in a range of 41300- 43200 during the week
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Q3 Earnings
Last week the corporate earnings failed to support the domestic markets. Barring HDFC Bank, other Nifty50 companies like HUL, Asian Paints, and Indusind Bank were penalized after the announcement of Q3 earnings. Reliance Industries announced its Q3 earnings on Friday post-market, and it disappoints investors. On Saturday, Kotak Bank delivered healthy Q3 earnings whereas Ultratech reported its net profit declined by 38%.
ICICI Bank and SBI Life Q3 earnings are due later in the day. On Monday investors will first react to the Q3 earnings and will penalize the company that announces the weak Q3 earnings. In the coming week, there are seven Nifty50 companies that will announce their Q3 results. Traders should closely monitor the Q3 earnings in the next week.
| Q3FY23 Result dates for Nifty50 Stocks | |
| 23 Jan 2023 | Axis Bank |
| 24 Jan 2023 | Maruti |
| 25 Jan 2023 | Bajaj Auto |
| 25 Jan 2023 | Dr. Reddy |
| 25 Jan 2023 | Tata Motors |
| 27 Jan 2023 | Bajaj Finance |
| 28 Jan 2023 | NTPC |
Macroeconomic data
The retail inflation for farm and rural workers eased to 6.38 percent and 6.6 percent respectively on a sequential basis in December 2022. This is mainly due to lower prices of certain food items, according to the labor ministry said on Friday. On Friday post-market, another report showed by RBI that India’s foreign exchange reserve rose to a five-month high of $572 billion in the week ended January 13.
The macroeconomic data released during the weekend were positive and the markets will react positively to this data on Monday. In the coming week, there is no major macroeconomic data to be released on the domestic front.
Global Stock Market Prediction Next Week
Last week the global cues impacted the domestic stock market sentiments and created volatility. The optimism of the reopening of China, and the Bank of Japan’s ( BoJ) ultra-lose monetary policy lifted the market sentiments during the week. On the other hand, the weak economic data from the US, and hawkish comments from the Fed and ECB officials regarding interest rate hikes hit the market sentiments. On Friday solid corporate earnings by Netflix and Google’s job cut report rallied the US and European markets.
Asian markets are likely to follow the positive cues from US markets on Monday. The major Asian markets like Shanghai, Taiwan, and Hang Seng ( till 25th Jan) will remain shut next week on account of the Lunar New Year. The US GDP data and Q3 earnings will remain focused and derive the global markets next week. The key economic data that are likely to impact the global stock market prediction are given below.
| Important Global Macro Data Next Week | ||
| 23 January 2023 | BoJ Monetary Policy Minutes | Japan |
| 23 January 2023 | Consumer Confidence Flash Jan | EA |
| 24 January 2023 | Jibun Bank PMI Flash Jan | Japan |
| 24 January 2023 | S&P Global PMI Flash Jan | EA |
| 24 January 2023 | S&P/CIPS Global PMI flash | GB |
| 24 January 2023 | S&P Global PMI Flash Jan | US |
| 25 January 2023 | PPI Core Output Dec | GB |
| 26 January 2023 | GDP Growth Rate Q4 | US |
| 26 January 2023 | Initial Jobless Claim | US |
| 26 January 2023 | New Home Sales Dec | US |
| 26 January 2023 | PCE Price Q4 | US |
| 27 January 2023 | Tokyo CPI Jan | Japan |
| 27 January 2023 | Personal Income/Spending Dec | US |
| 27 January 2023 | PCE Price Index Dec | US |
| 27 January 2023 | Michigan Consumer Sentiment Jan | US |
| 27 January 2023 | Pending Home Sales | US |
Crude Oil Prices
The crude oil price could limit the Indian stock market’s northward journey in the coming days. The oil prices closed about $1 a barrel higher last Friday and gained for the second consecutive week. Crude oil is gaining as China’s economic prospects brighten, and crude oil demand is increasing in the world’s second-largest economy. On a weekly basis, Brent crude oil gained 2.8% while WTI increase 1.8%.
The International Energy Agency (IEA) already said in its report that oil demand is going to increase due to the reopening of the Chinese economy and now OPEC also forecasted regarding rebound in crude oil demand in China. The crude oil price will also get further support if the US Fed downshifts to small interest rate hikes, which could again brighten the US economic outlook. Traders need to closely monitor the crude oil prices, as it could dampen the domestic market sentiments.
FII & DIIs flow
Foreign Institutional Investors (FIIs) continued to sell in the Indian equity markets during the week. Foreign investors have offloaded Rs 2461.03 crore worth of shares while Domestic Institutional Investors (DIIs) were net buyers and they bought Rs 3383.72 crore in the cash segment for the week that ended on 20 Jan 2023.
So far in 2023, FIIs have sold Rs 19880 crore in the Indian equity markets and according to NSDL data most of the selling comes in two heavyweight sectors- Financials and IT. FIIs also took a bearish stance in Oil & Gas, Telecom, and Auto sectors during this period. Whereas Metals & Mining and Construction have seen some substantial buying by the FIIs.
With the reopening of the Chinese economy, the FII flow has been redirected to China as the valuations are more attractive there than in India. FIIs flow would remain volatile in the Indian markets in the near term which may impact negatively the domestic markets.
Conclusion:
Indian stock markets made a modest gain for the second consecutive week. The markets traded range bound in absence of any major trigger last week. Next week will be truncated, as the Indian stock markets will remain closed on Thursday 26 January on account of the Republic Day celebration. The monthly F&O expiry will be on Wednesday i.e 25 January.
Indian markets are likely to open higher on Monday due to positive global cues but remain volatile, as investors will react to Q3 earnings that were announced during the weekend and on monthly F&O expiry. You can also follow our Daily Morning Report at 7.30 am to know the market direction.
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