What are the major trading cues that you see for the coming week starting on 25th July 2022?

Here are some triggers that you should watch out for in the coming week starting Monday.

· Nifty closed the previous week with 4.18% gains with the bounce being led by short covering and select buying on positive FPI flows. While the mid-cap index was up 3.68% for the week, the small cap was up 10.74%. Watch for action in the small cap space.

· On the results front, the markets are likely to react favourably to the results of RIL but most likely markets would be neutral to the numbers of Ultratech and JSW Steel. In the next week, major large cap results include Axis Bank, Tata Steel, TECHM, Asian Paints, Bajaj Auto, Bajaj Finance, Maruti, Tata Motor, Reddy Lab. Small and mid-caps will be dominated by Chennai Petro, Canbank, Glaxo, Tata Power, Biocon, Colgate and Laurus.

· In central bank action, the ECB rate hike of 50 bps was more hawkish than expected and that opens up the risk of sovereign defaults once again in Europe. All eyes will be on the FOMC statement to be issued on 27th July. The debate is still open on whether it will be 75 bps rate hike or 100 bps, although more members are now veering towards 75 bps.

· FIIs infused Rs8,532 crore into equities this week and Rs1,099 crore in July month to date. That is encouraging but hardly trend indicative. Meanwhile, Brent has gotten closer to $100 and that should be some relef for trade deficit and current account.

· You cant miss the rupee in these volatile markets. The level of 80/$ will remain the crucial level for the rupee and RBI intervention around these levels will be the deciding factor. Things can predicate largely on the Fed actions. Meanwhile, this week could again see the forex reserves dipping further from $580 billion to $572 billion, when the forex numbers are announced on Friday.

· On the F&O range accumulation front, the indicative range of call writing and put writing is in the range of 16,600 on the lower side and 17,000 on the upside for the Nifty. However, VIX remains low and that will encourage traders to buy on dips at lower levels.

· Finally, let me turn to the key global data points that can have a bearing on the Indian markets. US data focus will be on FOMC statement, API stocks, new home sales, trade balance, GDP QOQ, jobless claims, core PCE. For rest of the world (ROW), the focus will be on EU CPI, GDP; Japan IIP, core CPI, jobs, retail sales; UK Industrial trends orders, HPI, net speculation etc.