InvestorQ : What are the major trading and investment cues for the trading week commencing on 06 April 2020?
Dia Deshpande made post

What are the major trading and investment cues for the trading week commencing on 06 April 2020?

Ria Jain answered.
2 years ago

The week starting 06 April is likely to be a holiday curtailed week with just 3 trading days and two holidays. Here are the major trading and investing cues for the week.

· COVID-19 will continue to remain the big story with more than 1.2 million infections and 65,000 deaths. This will drive the outlook for the markets with all eyes on India where the infections have crossed the 2,500 mark.

· Moody’s downgrade of banks from “Stable to Negative” will be a major overhang as asset quality concerns are building up on private banks. Private Banks to remain under pressure.

· US jobless claims at record 6.6 million raises the spectre of job losses in India and the likely impact on the India consumption story in the coming days. FPIs have sold Rs.1.24 million in March and this risk-off strategy could be underlined by the lockdown.

· Markets await the cue on crude, although the OPEC / Russia meeting on supply cuts has been put off. Trump has hinted at supply cut of 10-15 million bpd and that could be the key to future oil prices.

· Mid cap stocks will remain under pressure after SEBI dismissed plea for leniency in insider trading rules for this quarter. Promoter buying had triggered interest in a lot of stocks, but that is now shut till 48 hours after the quarterly results.

· Lower GDP is fait accompli but Fitch GDP estimates at 2% could be a real worry for the India consumption story. The rising fiscal deficit also means that room to spend their way out of trouble may be limited for India.

· Markets are anticipating a relief package announcement for SMEs. This may not have a direct market impact, but it could hold the key to consumption and rural demand build-up for consumer sectors like FMCG, NBFCs and autos.

· Government cues on lifting of the lockdown on April 14 could be clear in this week. Any extension of the lockdown could be negative for the stock markets.

Markets will look for stability in Indian rupee and in the stock market VIX ratio. Rupee under 76/$ and VIX and 40 could positive for markets.