What do you see as the major cues for the stock markets in the coming week starting on 28th February?

The week starting Feb-28 will be dominated by the ongoing war in Ukraine. However, it is a truncated week due to Tuesday being a trading holiday. Here are the cues.

a) Nifty falls 4% in the week, even as the Mid cap index fell 3% and the small caps 5%. The trigger for the sharp fall was the war between Russia and Ukraine, keeping oil, rupee and equities on edge. VIX spiked to 33 levels, before tapering on Friday, but stress is high.

b) During the week, Nifty fell below 16,300 levels on Thursday but closed higher. For now, Nifty level of 16,800 is crucial and Nifty stays weak as long as it is below 16,800 levels with 16,300 as the last immediate support for Nifty.

c) War situation in Ukraine worsens as Russia enter deep into Kiev and almost at the gates of Kiev. The big trigger for the week will be how the global markets react to SWIFT sanctions on Russia by the US, UK and Canada disrupting payment flows.

d) India’s GDP numbers to be out on 28-Feb with SBI Research pegging Q3 GDP growth at 5.8% due to Omicron lag effect. Core sector announcement on 28-Feb and the auto sales numbers for January will hold the key. Focus shifts to Maruti and Hyundai for revival

e) Jerome Powell testimony to the Senate next week will give the true colour of the Fed policy on rates in March meeting. If the Fed chooses to go slow on rate hikes, then government may take the risk of announcing LIC IPO in current fiscal itself.

f) After last 2 lag months, PMI manufacturing and PMI services will hold the key due to being the short term, high frequency indicators of economic growth. Both PMIs in India have been under pressure due to the Omicron lag effect.

g) US data points for the week focuses on trade balance, retail inventories, PMI, ISM, API Weekly Crude Stocks, Powell testimony, jobless claims. Among others it is EU PMI, Core CPI, PPI ; Japan IIP, retail sales, construction orders, PMI, unemployment; China PMI.