InvestorQ : What is your weekly view for the next trading week commencing on Monday 31 May? What are the triggers?
Aditi Sharma made post

What is your weekly view for the next trading week commencing on Monday 31 May? What are the triggers?

diksha shah answered.
2 years ago

Clearly, the trend is higher as we saw last week. But the coming week is heavy on trends and on data flows. Here is a quick take.

· Nifty touched an all-time high of 15,400 during the week, egged on by banks and financials. However, metal stocks could continue to face stress after Credit Suisse downgraded metals due to concerns over the supply short squeeze ending.

· The action could shift to the Nifty Mid Cap index after it gained only 1.1% against 1.8% for the Nifty. In addition, the F&O expiry on 27 May saw rollovers of 80% against the recent monthly average of 66%. That is a good sign for markets, other than metals.

· Coronavirus cases drop to below 2 lakhs per day from above 4 lakhs, but deaths remain higher than normal. In this situation, the focus would shift on some big earnings from ITC, Aurobindo Pharma, Motherson, Bharat Forge, BOI among others.

· On Monday, we will know the Q4 GDP growth and FY21 GDP growth. If Q4 is better than 2% and FY21 is better than -7.5%; it is positive. Markets will also keenly watch PMI, core sector data and auto sales data in the coming week for cues on manufacturing.

· Two big announcements this week include RBI monetary policy on 04 June and OPEC meet 01 June. RBI rates and stance may remain constant, but the big story will be borrowings and GSAPs. Oil is a worry with petrol crossing Rs.100 per litre across cities.

· Call writing shifts to 16,000 Nifty, so the higher ceiling leaves a good scope for a rally in the next week. Also, with solid F&O rollovers and VIX at 17.40, downsides certainly look to be limited with positive bias.

· Key US data points include PMI, Construction Spending, Vehicle sales, Jobless claims, non-farm payrolls, factory orders. Also focus ***** to EU PMI, Inflation, Retail Sales; Japan retail sales, IIP, Jibun PMI, household spend and China PMI.