InvestorQ : What are the major trading and investment cues for the stock market for the week starting on 30 December 2019?
Mary Joseph made post

What are the major trading and investment cues for the stock market for the week starting on 30 December 2019?

sara Kunju answered.
2 years ago

Some of the major cues for the week starting 30 December can be summarized as under and are likely to influence the market direction during the week.

· The second round of Operation Twist is scheduled on Monday for a similar amount of Rs.10,000 crore. It is expected to push yields lower and bond prices higher; benefiting banks.

· PSU banks are likely to be buoyed with capital infusion in 3 banks viz. IOB, UCO and Allahabad Bank but RBI report on rise in NPAs by 60 bps could be negative.

· Auto numbers for December would focus on whether the marginal recovery in auto numbers in November sustains in December or not.

· Core sector numbers on 31 December could again be disappointing. Manufacturing has been under pressure and core sector has been in the negative for 3 months in a row as also has been the index of industrial production (IIP), which is 42% core sector.

· All eyes will be on Reliance Industries as the stock could remain under pressure due to the uncertainty over the stake sale in Aramco. The $4.5 billion due from RIL has held up the $15 billion sale to Aramco. Pressure on RIL likely to continue

· Market volumes are expected to be lower and thinner due to limited institutional participation. Most FIIs and MFs don’t try to take any fresh risky decisions during this period.

· Markets will look for the pre-budget hints on the economy, markets and tax will be crucial. Equity markets will prefer personal tax cuts, fiscal deficit control and higher infrastructure spending in Budget

· Oil and rupee could be driving FPI flows during the week. Brent is already at $69/bbl and that is not good news for the INR. FPI sentiments likely to remain cautious

· The all important current account deficit (CAD) number for the September quarter will be announced on 31 December. The CAD is likely to move higher; something that will be negative for the INR and for sovereign ratings

· Markets will look forward to cues on the US-China trade deal front. China has not shared the optimism of the USTR but a sober tone from Xi could give a boost for requity markets.

· FII buying sustaining in the week will be positive for markets. FIIs have infused Rs.1.20 trillion into Indian equity and debt in 2019 and signals for 2020 will be the key

· China manufacturing data for December expected this week. Greenshoots of growth in China will hold the key to sustenance of interest in the metal price cycle

Markets are likely to be overall cautious although downsides could be limited due to low VIX.