What are the major cues for the stock markets for the trading week commencing on 22nd October 2019 and what factors to look out for?

The week commencing on 22 Oct will be a shortened week since Monday was a non-trading day due to Maharashtra Assembly elections. Markets will also be preparing for all important Mahurat trading on Sunday 27 October. Here are the major trading and investment cues.

· The Nifty comes in for the week after a prolonged 6- day rally. The markets rallied nearly 3.5% during the week and the Nifty is just about 400 shy of the 12,000 mark. The Diwali euphoria will be critical to see if the Nifty and the Sensex are able to scale the psychological barriers of 12,000 and 40,000 respectively during the next few trading sessions.

· BREXIT will remain a major overhang for the markets. The EU and the UK had signed a deal last week but over the weekend the UK Parliament only managed to postpone the decision till 31 October. While Boris Johnson remains positive about exiting the EU on 31 October, it may not really be that simple.

· FPIs have turned net buyers once again in October and have infused close to $750 million in the first 3 weeks of the month. A positive flow month will be a key factor in holding up the markets.

· The exit polls of the Maharashtra assembly elections and the Haryana elections will also be key inputs for the markets. A decisive mandate for the NDA will be seen as an affirmation of the reforms process. Of course, the markets would still prefer to wait out the actual results announcement on 24 October.

· The Indian government has just announced a full-fledged trade deal with the US. If that takes care of most of the preferential issues, it could be a boost for Indo-US trade and go a long way in boosting market sentiments.