Volatile week likely ahead of key economic data

Theweek gone by was yet another tough and down week. After remaining sideways over the previous week, BSE-SENSEX lost 2,032.65 points or 2.43 per cent to close at 81,537.70 points while NSE-NIFTY lost 645.70 points or 2.51 per cent to close at 25,048.65 points. BANK-NIFTY lost 1,622.05 points or 2.70 per cent to close at 58,473.10 points. The broader markets saw BSE-100, BSE-200 and BSE-500 lose 2.74 per cent, 3.01 per cent and 3.31 per cent. BSE-MIDCAP lost 4.20 per cent while BSE-SMALLCAP was down 5.79 per cent. The best performing sector of last year, BSE-METAL was also down 1.01 per cent this week. Incidentally all sectorial indices were negative this week. Markets gained on just one of the five trading sessions and was down on four. In three weeks’ duration, the cumulative damage to the benchmark indices has been about 5 per cent which is substantial by all counts.

The Indian Rupee was under pressure and lost Rs1.11 or 1.22 per cent to close at Rs91.88 to the US Dollar. Dow Jones lost 260.60 points or 0.53 per cent to close at 49,098.71 points. Dow gained on two of the four sessions and lost on two.

There were two listings last week. The first was of Bharat Coking Coal Limited or BCCL which got listed on Monday the 19th of January. Against an issue price of Rs23, the share debuted at Rs45.21 which was also the high and closed day one at Rs40.66. By Friday, the share had shed some of its gains and closed at Rs36.59, a gain of Rs13.59 or 59.09 per cent.

The second share to list was Amagi Media Labs Limited which listed on Wednesday the 21st of January. Against the issue price of Rs361, the discovered price was Rs317.65 and the closing price Rs348. This was the first share to close in the negative on the main board during calendar year 2026. The share recovered thereafter and closed at Rs375.70, a gain of Rs14.70 or 4.07 per cent. There are no other main board issues slated to open in the coming week and it appears markets are now awaiting the presentation of the Union Budget on Sunday the 1st of February.

The week ahead begins with a trading holiday on account of India’s 77th Republic day celebrations. Markets would trade on Tuesday with NSE-NIFTY futures for January expiring on that day. The mood is negative and with the kind of continuous selling by FPI’s over the last few months and the geo- political scenario, not much of optimism could be expected from the expiry. Further, the damage to share prices is across the board and not restricted to any one segment.

NIFTY FUTURES are down 890.70 points or 3.43 per cent at 25,048.65 points. The series had begun at 25,938.85 points. The best one could expect is the bulls to pull something back from the lost series. It is widely believed that India and the European Union would sign a trade deal which would be mutually beneficial to both. In terms of timing it could happen as early as Tuesday. However, considering that the long awaited India-US trade deal is yet to happen, one can at best be optimistic but not bank on it. On the positive side, if such a trade deal were to happen, expect the US to be forced into signing a trade deal with India, as their bullying tactics would have failed. In short, plenty of reason to be hopeful, but need to be patient.

Lows made during the week were around 24,900 points, a level last seen during the beginning of October. While a lot of price damage has happened, the unfortunate part is that valuations have not improved significantly simply because early results from Q3 results have not been up to the mark. Everything and everyone is waiting for something to happen.

Coming to Donald Trump and his famous tariffs, he has literally decided to dictate which country will do trade with whom. If it is not to his liking, then tariffs against that country for supply to US would be imposed at levels of 50 and 100 per cent. One major point is that it is up to the exporting country to decide whether they want to export or not. Secondly, tariff is for importing into US, therefore the same is paid by the American, not the seller or shipper. Don’t know when this would become clear to all that matter.

Coming to the short four day week which would end with Budget happening on Sunday.It would be choppy and volatile. A lot is likely to happen and will happen on various fronts. For sure things will not remain the same next Monday, but what would have transpired and what will be the impact, one will have to wait for the two important events. Trading levels for the week ahead would be support at 24,700 points on NIFTY and further down around 24,200-300 points.

On the upside, one must look at initiating long trades only after the markets sustain 25,300 points. Bide your time, keep your fingers crossed and hope that the EU trade deal and budget brings cheer to the capital markets.

(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)