Economy

Expect a High Volatile Market This Week Amidst 2022 Budget

This week, most investors and experts could be looking for several macro and micro indicators such as the 2022 Union Budget, Q3 earnings, PMI data, and auto sales numbers. As the global market event related to the US FED policy and the monthly expiry of our markets is done, the complete focus now lies on Budget 2022, which will probably determine a short-term trend.

The domestic trend could dampen in the short term considering the budget and state elections outcome. The PMI data release could be another critical domestic data point the investors need to watch out for. Investors could choose systematic investment methods when the market is highly volatile since it might be a better strategy to follow.

Also, equity markets have been noticing increased volatility in the last few days. There are expectations from the government side to announce a progressive budget that could revive the economic growth. Nevertheless, given the various state elections, one cannot dismiss the risk of a populist budget completely. Capital goods, housing, PSU banks, real estate, etc., are a few sectors that would continue to remain in focus ahead of the budget.

Furthermore, the monthly sales figures of the automobile industry are surely going to awaken the interest of investors who are trying to predict future trends in auto stocks. With an active week ahead, investors could stay away from aggressive wagers.

The upcoming week is critical for the economy as a whole, not just the equity market. The upcoming week marks a new month’s beginning, and auto sales start kicking in from 1 February. Besides, the services and manufacturing PMI data also are scheduled during the coming week.

The 2022 Union Budget could set the domestic markets amidst the global sell-off. Since volatility could remain high during the upcoming budget week, investors should proceed with a cautious stance and choose hedged positions. There is the expectation that the Nifty index could hang around in between 16,600 and 17,600, and on both sides, a decisive break could set off the following directional move.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

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