InvestorQ : What are the major triggers and cues for the stock markets in the trading week starting on October 05?
Anu Biswas made post

What are the major triggers and cues for the stock markets in the trading week starting on October 05?

diksha shah answered.
2 years ago

The coming week is likely to be action packed. Here are some key factors that could determine the direction of the markets.

· Markets will await the Supreme Court verdict on EMI moratorium on Monday, October 05. It looks like waiver of interest on interest will happen, but it will be credit negative for banks if they have to foot the bill.

· Higher fiscal deficit at 109% in 5 months almost neutralizes the benefits of a current account surplus. Spurt in fiscal deficit will harden bond yields and debt costs. That could negatively impact banks and capital intensive stocks.

· IPO action to be relatively muted after a busy 3 weeks. Watch out for listing of Angel Broking IPO and closure of Likhitha Infrastructure IPO. Angel grey market premiums are negative and could dampen IPO market sentiments.

· Big news could be in the combined stimulus package of the US and India. While the US expects $2.4 trillion as fiscal stimulus, India is expecting a fiscal stimulus of 2% of GDP during the week. Positive indications could be the in-thing.

· Focus will shift to the IT sector as TCS announces its results on 07 October. Growth and operating margins to be watched. US District Court striking down Trump’s H1-B proposal will be a sentimental positive for IT stocks in general.

· PMI manufacturing at 56 shows solid build-up of momentum but Trump testing positive for COVID-19 could dampen global growth sentiments and decisions may be delayed.

· Auto could be the big story this week after auto numbers for four-wheelers showed good bounce in Sep-20. For the markets, the real focus will be less on the factory dispatches and more on dealer feed, which is not too positive as of now.

· RIL accounted for 40% of Nifty gains since March and it will continue to be at the centre of attention. This week could see the stock continuing its fund raising activity having already raised a whopping Rs.32,200 crore from RRVL monetization. Markets also will wait for the INVIT plan of Reliance Fibre.

· After a long time, there are some political cues. Markets may remain cautious ahead of Bihar Elections in the end of October. This is the first major state election after COVID and markets would be keen to see if the sentiments affect the reforms flow.

· The 2 stocks in the news will be Reddy Labs on its proposed Phase 3 of Sputnik-V COVID vaccine trials and Tata Group on its proposed monetization of digital business. They could be the stocks or set of stocks to watch out for.

· Key triggers for the month will include US PMI, CBETI, US Trade, US Redbook, FOMC Minutes, EU PMI, EU Retail Sales, JPN M3 and China trade.