InvestorQ : What are major cues for traders and investors in the coming week and how should market players position themselves?
Neelam Naik made post

What are major cues for traders and investors in the coming week and how should market players position themselves?

Priyanka N answered.
2 years ago

It is going to be an interesting week because the Nifty and the Sensex are quite interestingly poised very close to their psychological levels. Here are some interesting cues for the coming week.

1. The Nifty level of 12,000 and the Sensex level of 40,000 will be crucial. Both these levels were breached twice in the last 10 days but the markets failed to sustain above these levels. For any upside in the market, the indices will have to sustain above these psychological levels. That alone will confirm continuation of an uptrend and for that the coming week will be quite critical.

2. Keep an eye on IL&FS where the investigation agencies are tightening their grip over the former top management of IL&FS for committing fraud with public money. A quick resolution to the IL&FS issue could be the key to a rapid bounce in the financial sector and the rebuilding of confidence in the markets.

3. Of course, the market can be expected to react negatively to the weak GDP numbers of 5.8%, although that was largely anticipated. Even the unemployment rate at 6.1% is at a 45-year high and that will also be a hang on the markets in the week. In addition, the auto numbers have been weak across the board and auto sector could be under pressure.

4. The second bi-monthly monetary policy will be presented on June 06th
by the Monetary Policy Committee and the markets are building in hopes of a rate cut ranging from 25 to 50 bps. The impact on the market will be based more on estimates versus actuals.

5. The PMI manufacturing and the PMI Services will be announced this week and both are expected to be under pressure due to the weak GDP numbers. That is also likely to have an impact on the overall market trajectory during the week.

6. Global sentiments cannot be ignored and they will remain a key factor. For example, the US is now expanding its trade war, which started off with China. Trump has promised to impose fresh tariffs on Mexican companies and has signed the withdrawal of GSP (General System of Preferences). Both are going to be negative for the market sentiments.

7. Crude cracked violently to around the $61.55/bbl in the Brent Crude market and has lost closer to 20% in just two weeks. That will be positive for India in terms of costs but it not great for sentiments because oil prices are falling due to weak growth concerns. You should also keep a tab on crude prices this week.

Apart from all these factors, the Union Budget date has also been announced on 5th July and that will also start building expectations. In short, it is expected to be a busy week for the markets and for traders.