Hi Diksha, what in your view could be the major triggers for the stock markets in the week starting on 12 October 2020?
Answer
Answer
There could be a variety of key factors driving the markets in the coming week. Here are a few of them.
1) On 13 Oct, the Supreme Court will give the final verdict on the interest on interest issue. RBI has told SC that EMI waiver beyond 6 months would be credit negative.
2) This week could see the monetary policy effect continuing. Promise of sustained accommodation through 2021 will be a boost for banks, NBFCs, realty and auto.
3) IIP and Inflation expected on 12 October. Markets await rebound in IIP and tapering of food inflation amidst Kharif season.
4) Mazagon Docks likely to list at a premium and UTI AMC IPO at a discount. They could hold the key to IPO markets.
5) IT sector to be in focus after Q2 results and buyback by TCS. Focus shifts to Infosys guidance and Wipro buyback this week.
6) While the US stimulus of $2.4 trillion could be delayed by elections, Indian stimulus is expected at close to 2% of GDP and may happen soon.
7) The week will be marked by key earnings including HDFC Bank, Wipro, Infosys, HCL Tech, Mindtree, D-Mart, Cyient, Tata Elxsi, IIFL Securities etc.
8) The stock markets await trade data on 15 October for signals of narrowing trade deficit and better exports performance to sustain CAS.
9) Big focus areas will be Coronavirus numbers and the vaccine story. Daily cases fell below 80,000 are recoveries are getting better. Quicker progress in phase 3 trials of Sputnik and Oxford vaccine will help.
10) Options accumulation is defining a broad Nifty range of 11,700 to 12,100 for the week and 12,000 could be sustained as VIX below 20 is likely to be favourable.
11) The announcement of the withdrawal of Vedanta Delisting offer will negatively impact the stock price. Vedanta was unable to get the required 90% of shares surrendered for delisting.
12) Key global data triggers to watch would include US Inflation, jobless claims, retail sales, EU IIP, EU prices and Japan Industrial production to set the trend.
This is likely to be a week when global cues could play a larger role.