China Covid situation, macro data, global trends to drive markets this week: Analysts

Macroeconomic data announcements, the Covid situation in China and global market cues would guide Dalal Street in the first week of trading in the New Year, analysts said.

Markets would also keep a track on rupee movement, Brent crude oil prices and foreign fund investment trends.

"As market players attempt to understand the Fed's stance, Indian markets may respond in lockstep with their international counterparts when the Federal Open Market Committee (FOMC) minutes are made public later this week.

"Back home, the New Year is poised to begin with auto numbers," said Apurva Sheth, Head of Market Perspectives, Samco Securities.

Purchasing Managers' Index (PMI) data for the manufacturing sector to be announced on Monday and services sector on Wednesday will also influence trading in the equity market.

"In the near future, the last Budget before the 2024 election, Q4 earnings, and the monthly auto sales number will be the key events that the market will be looking for in January 2023.

"Apart from that, crude oil prices and rupee movement will be other important factors," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

Market experts opined that this year the Indian market will be influenced by a combination of domestic and global factors, including the coronavirus situation and policy initiatives in the Union Budget.

Global factors like recession fears, geopolitical risks and rising coronavirus cases in China could keep equity markets volatile, they added. 

"Q3 results and the upcoming Union Budget could provide much needed fresh positive triggers to the Indian equities. Auto sector is likely to be in focus this week on back of monthly auto sales data," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

The 30-share BSE Sensex climbed 2,586.92 points or 4.44 per cent last year. The benchmark touched its all-time high of 63,583.07 points on December 1 last year after hitting its 52-week low of 50,921.22 on June 17.