InvestorQ : What are the major trading cues for the trading week commencing on August 05th and how to trade in the coming week?
swati Bakhda made post

What are the major trading cues for the trading week commencing on August 05th and how to trade in the coming week?

Dia Deshpande answered.
3 years ago

The coming week is expected to be action packed beginning with the all important monetary policy. Here are some of the major cues for the week.

· The monetary policy will be announced on the 07th of August on Wednesday at the conclusion of the 3 day meet of the Monetary Policy Committee. The markets are already reconciled to a minimum 25 bps rate cut, based on what the Fed has done. Anything above that will be seen as a bonus by the markets.

· The trade war will be closely watched. Towards the end of last week, Trump had announced a 10% tariff on Chinese imports to the tune of nearly $300 billion which again raised the fears of an economic slowdown across the world. That is likely to keep the pressure on commodity prices and metals could be the worst hit.

· The emerging situation in Kashmir will also be closely washed. While it may not have market implications, the troop movements have been quite aggressive and the markets are a tad jittery about the emerging geopolitical situation on the borders. A war like situation is never positive for the markets.

· Some of the major stocks like SBI, HDFC, ITC and Bharti which announced results last week are likely to see the impact of the results in this week. The impact on the price of these four stocks is likely to be positive.

· The coming week is also likely to be marked by some key results announcements. Indiabulls Finance, Titan, Cipla, HCL Tech, M&M, Tata Steel, Ultratech, GAIL and BPCL are among the key results that will be announced in this week.

· Markets will keep a constant eye on the FII selling numbers. Between July 05th and August 02nd (since the budget was announced), the FIIs have sold nearly $3 billion worth of equities. This overhang is likely to remain because even on Friday the FIIs sold to the tune of nearly Rs.2900 crore in equity.

· The government has agreed to do a rethink on some of the controversial decisions made in the Union Budget. For example, there are indications that the Section 119 may be used to exempt FPIs from super rich tax. Similarly, the increase in public shareholding to 35% has also been put in cold storage for now. These will be viewed positively.

· The PMI data for manufacturing was quite encouraging and the PMI data for services will be watched closely. In addition, the foreign exchange data will be the key in determining whether the government goes ahead with the sovereign bond or not.

· Finally, in global cues, the PMI data for the US, Europe, Asia and Japan will be critical as it will give the first clues of growth momentum in these economies. The US is also likely to release the Baker Hughes oil rig count, which is a critical input for oil prices.