Markets week ahead: Infosys kicks off earnings, factory data begins countdown to RBI review

India will release November factory output on January 10, the first important data ahead of the Reserve Bank of India's monetary policy review on January 28.

Investors are also bracing for October-December earnings results, as they look for signs of how much a slowdown in economic growth is impacting corporate profits. As is customary, Infosys Ltd will unofficially kick off results from blue-chips when it reports earnings on January 10.

Industrial output data will be followed by the more important December consumer and wholesale inflation data in the week starting Monday, January 13, amid widespread expectations food prices have substantially eased last month.

Although the RBI surprised investors by keeping interest rates on hold last month, after 0.25 per cent hikes each in September and October, inflation is expected to hold the key to its future action.

Global cues will also be important, with China posting GDP, the United States posting monthly employment data, and the Bank of England and European Central Bank holding policy meetings.

The rupee has started the year on a weak note, being hostage to global dollar strength and will look at global cues, including China GDP and Fed minutes for additional cues.

For debt markets, cash is expected to remain comfortable with the overnight rate near the apex bank's repo rate.

A key report on the monetary policy framework in India is also awaited.

The report is expected to signal into which inflation indicator should be the focus of the monetary policy, the objectives for the central bank, and its liquidity management, among other factors.

Copyright @ Thomson Reuters 2014