How do you see the major stock market cues for Tuesday, 21st June trading?

On Monday, the American markets the Dow and the NASDAQ were shut on account of Juneteenth Day celebrations. Hence US cues are not there overnight. However, the European markets were up by more than 1% and in early trades on Tuesday, even the Asian markets Nikkei is up 1.7% while the Korean KOSPI is up 0.5%.

One reason for this bounce could be that a semblance of confidence is returning to the global markets that central banks like the Fed, ECB, BOJ, PBOC and RBI could tweak the monetary and fiscal policy so as to ensure that the spectre of recession is avoided. Henec, even the SGX Nifty was trading higher by 45 points in early trades on Tuesday.

In terms of key news flows, Vedanta may be under pressure due to the Sterlite Tamil Nadu copper smelter being sold. Expect pressure on Indian steel companies as exports threaten to trend lower by about 40% yoy on higher duties. Meanwhile, Tata Steel is working on lowering its coal prices by importing from Russia. US recession is still a big risk.

In terms of F&O cues for the day, there was long build-up in HPCL, Britannia and JK Cement, and short covering in Crompton, Coforge, Ashok Leyland and TCS, which is a bullish signal. At the same time there is long unwinding in Indiamart, Birlasoft, RBL Bank while there is short build-up in GNFC, Chambal, Apollo Tyres and Vedanta, giving negative signals.

After selling Rs34,500 core of equities till 17th June, FPIs sold another Rs1,217 crore on 20th June. However, this was partially neutralized by domestic institutional flows of Rs2,093. In other important cues, the Rupee dollar exchange rate stood at Rs77.969/$ and 10-year bond yields at 7.427%. Crude was slightly higher at to $115.69/bbl ahead of API data.