What in your view are the major cues for the stock markets in the trading week between December 07 and December 11, 2020?
Answer
Answer
The following are some of the key triggers for the stock markets in the coming week. These are largely indicative of how to read the market direction.
· The RBI decision to continue with the accommodative stance of monetary policy will be a key driver, especially for the rate sensitives like banks, NBFCs, autos and realty.
· Last week, Nifty breached 13,000 and Sensex breached 44,500 convincingly. Both these levels will be offering support in the coming week.
· The estimates of RBI upgrading of GDP contraction levels to -7.5% for FY21 is a major positive for industrials, infrastructure and also for the manufacturing sectors.
· Even as India reports 94.2% recovery rate from Coronavirus, the vaccine developments on the Pfizer BionTech front could only increase risk appetite of investors.
· Markets are heavily betting on the US stimulus package at a consensus level of $908 billion after payroll data disappointed. That is surely a market booster dose.
· The all-important October IIP numbers will be announced on 11 December, followed by CPI inflation on 14 November. IIP had turned around to +0.2% in September IIP data.
· Good old FPI flows continue robust at Rs.10,100 crore in December first week. This comes on top of Rs.65,000 crore infused in November as FPIs go risk-on.
· Crude oil at $49.25/bbl could pose a macro concern for India as anything above $50/bbl is normally an added cost. This was triggered by steep supply cuts by OPEC sustained.
· Option writing hints at a range of 13,000 to 13,500 for the Nifty even as the range has been consistently moving higher.
· VIX falling sharply during the week to 18.02 levels is a signal that markets will remain a buy-on-dips market with limited downside risks.
· Farmer agitation could be the bugbear and markets will closely watch the next round of farmer talks on December 09 to resolve MSP issues as rural demand drives India.
· GMP or the grey market premium for Burger King IPO will be under the scanner after the IPO was oversubscribed 157 times
· Key global data triggers for the week will include US JOLTS, jobless claims, inflation; EU GDP and Interest rates; Japan GDP and machinery orders; China inflation.