Speculation on Budget announcements may turn markets volatile this week

NEW DELHI: Speculation over announcements that may be made in the upcoming Union Budget on February 1 may lead to some volatility in the domestic stock markets, even as most investors take their cues from the ongoing earnings announcements from India Inc for the third quarter (Q3FY21).

News on the Covid-19 vaccine from around the world, and updates on the roll-out in India, is also set to be an important driver for stock exchange indices. 

“Going ahead, the market could be volatile given the ongoing earning season and the weak global cues. The run-up to the Budget would also add to the volatility,” noted Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services Ltd.

Others note that as the earnings season unfolds, investors may be prone to making stock-specific decisions. A few major earnings announcements scheduled for this week include the Bank of Maharashtra, Bajaj Finance, Federal Bank, Asian Paints, Bajaj Auto, and Reliance Industries Limited.

“Along with the weak global market, this week, the domestic market will shift its focus on the banking and finance sector as major banks and NBFCs are to release their quarterly results,” said Vinod Nair, Head of Research at Geojit Financial Services.

As India continues to roll out the vaccine, traders say that there may be swings in certain specific stocks. The first Covid-19 vaccine shots in India were given on Saturday to nearly two lakh frontline healthcare and sanitary workers. Trends in Brent crude prices, the rupee, and foreign investment patterns will remain key monitorables for investors.