Action-packed week for equity market: Budget, macro data, earnings eyed

It will be an action-packed week for the equity market as a host of crucial events are lined up with the Union Budget hogging the limelight along with macroeconomic data announcements, quarterly earnings and global trends, analysts said.

"This week is critical, not only for the equity market, but for the economy as a whole. We have the Union Budget scheduled for February 1 and we expect the government to continue with growth agenda but with a roadmap for fiscal prudence. This week marks the beginning of a new month also and auto sales start pouring in from February 1. 

"Besides, we have manufacturing and services PMI data also scheduled during the week," said Ajit Mishra, VP Research, Religare Broking.

Mishra further said that the Union Budget would set the tone for the domestic markets amid the global sell-off. 

"Volatility remains high during the budget week so participants should continue with a cautious stance," he added.

"This week is going to be very important and extremely volatile on the back of the Union Budget however the good part this time is that the market is heading to the budget on a very light note and there is a high probability of a post-budget rally. A similar trend was visible last year where the market witnessed a pre-budget sell-off and then there was a post-budget rally," Santosh Meena, Head of Research, Swastika Investmart Ltd said.

Other than the budget, Meena said global cues will be very important where global markets are trying to digest rising interest rate scenario but geopolitical uncertainties are another major concern. 

"The rising dollar index and rising crude oil prices are other issues for emerging markets like India. We are in the middle of the Q3 earning session and so far earning session remains good while we have lots of important earnings lined up this week," Meena added.

Last week, the domestic market followed global reactions of Fed policy meeting, Russia-Ukraine tension amid pre-budget jitters.

In the holiday-shortened last week, the 30-share BSE benchmark plummeted 1,836.95 points or 3.11 per cent. 

"While the US Fed outcome is now behind, several other factors including ongoing result season, Union Budget on Feb 1st and Russia-Ukraine conflicts would keep the market volatility high this week as well," according to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd. 

Vinod Nair, Head of Research at Geojit Financial Services, said, "This week, the release of PMI data for January will be another key domestic data point that the investors should watch."