What would be the major cues I need to watch out for when trading markets in the week starting on 26 October 2020?

Here are some of the major cues you must look out for in the coming week.

a) While the Sensex closed above 40,000, Nifty is still below 12,000 so that will continue to be the level watched out for any breakout.

b) The all important Bihar elections start this week and keep an eye on pre-poll surveys and alliances. Markets will look at the vote as a referendum on the COVID-19 handling of the government.

c) You can expect FMCG stocks to be in the limelight after Hindustan Unilever, Asian Paints and Nestle showed strong product growth driven by rural demand.

d) The week will be driven by big Q2 results announcements including names like Kotak Bank, Bharti Airtel, Tata Motors, Axis Bank, Hero Moto, L&T, Reliance Industries and ICICI Bank. For a different reason, HDFC Bank share the limelight as Puri demits office.|

e) US could most likely induce volatility into Indian markets as the race between Biden and Trump gets extremely tight and could be a razor finish. Expect bouts of volatility.

f) The foreign investors continued to buy aggressively as they infused $1 billion into Indian equities. Till date, FPIs have infused over $2 billion in October. DFIs remain sellers.

g) There is good news on the Coronavirus front with recovery rate up to 90% and fatality rate down to just 1.5%, among the lowest among major countries.

h) Core sector data for the month of September will be published on the last trading date of the week. Infra output is already at 92% of pre-COVID levels and the markets will now look for tangible positive growth in output.

i) F&O expiry will happen around 12,000 levels and that could induce expiry day volatility in the markets. However, VIX at 21 levels is a consolation. Option range is indicated at 11,700 to 12,200.

j) Global triggers for the week include US home sales, durable goods orders, Q3GDP, jobless claims, ECB interest rate, EU inflation, BOJ policy etc.