2 triggers that will move market in January 2022: Ajay Bagga

We have got the Nifty back above 17,000, Santa visited Dalal Street for a really short time this year?
Volumes are too thin and so we should not read too much into the next five days’ market moves. It is on very thin volumes in a holiday season but overall the same three issues remain for the markets– central banks tightening globally; the Omicron spread and the impact on the economies; and how embedded inflation remains into the economies. Those are major issues.

For India, the added issue is FII outflows. From January till date, about Rs 100,000 crore have gone out of our markets and of course a bit of it has come back in terms of IPO inflows and a huge amount has come in terms of venture capital funding into start-ups. So overall as a country, we have seen net inflows only but the secondary markets have suffered an outflow which has accelerated over the last three months. That becomes a big sentimental factor for the direction of the Indian markets.

We were anticipating a pre Budget move but this session of Parliament was largely a no go, a washout with very little business getting transacted. Now the market will look for Q3 results coming in post January 10. Then the pre budget expectations will get embedded in the market sentiments. Those two will become the drivers for our markets but maybe 15 days from now.