Market Ahead Podcast, June 14: Factors That Could Drive Markets This Week


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As the easing of state restrictions rekindled hopes for a faster economic recovery, markets rallied as Sensex and Nifty hit their respective all-time highs last week. It was also the fourth consecutive week of gains for the benchmarks.

Analysts expect investors to follow the reopening of the economy, the pace of Covid vaccinations, macro data and the US Fed’s decision this week. While the overall market setup remains positive, some consolidation cannot be ruled out, they say, as benchmarks have risen nearly 8% in one month and with the last leg of the season’s quarterly earnings season. March 2021, the action specific to equities could continue. They suggest continuing with the “buy down” approach.

First, attendees will first react to IIP numbers that were announced on Friday after trading hours. That aside, macroeconomically, CPI and WPI inflation for May will be released on Monday, while trade balance data for May will be released on Tuesday. And on Friday, the minutes of the recent RBI political meeting held June 2-4 will also be released.

Globally, markets will be watching closely for the results of the US Fed’s June 16 meeting which analysts say will keep markets volatile. However, they expect the ongoing consolidation in global markets to end if the US Fed reaffirms its dovish stance on interest rates amid the fear of inflation.

Meanwhile, on the earnings front, 200 companies are set to release their quarterly figures this week, including some leading ones such as Coal India, LIC Housing Finance, Jubilant Food works, Power Finance Corporation, Power Grid and NTPC.

Investors will continue to keep pace with Covid infections and vaccinations in the country. New cases of covid in India are below 1 lakh for the seventh day with the pace of vaccinations on the rise in the country. This will lead to further unlocking by states and economic recovery.

Primary market action will also be high as four new shows hit the streets this week, namely Shyam Metalics, Sona Comstar, Dodla Dairy and Krishna Institute of Medical Science. The first two IPOs will be open for subscription today while the other two on June 16.

Finally, the evolution of oil prices, the trajectory of the rupee and the flow of FII will also influence the mood of the market.

And now, let’s take a look at today’s business setup.

Asian stocks were mixed on Monday in thinned trading over the holidays as investors braced for a key Federal Reserve meeting later in the week. Stocks posted modest gains in Japan and slipped in South Korea. Trade volumes are expected to be low with a number of public holidays in the region, particularly in Australia, China and Hong Kong.

Japan’s Topix index gained 0.1% and South Korea’s Kospi index fell 0.2%. S&P 500 futures rose 0.1%.

Following a mixed trade setup, Indian markets appeared poised to open lower. SGX Nifty lost 75 points to 15,748 at 7:40 a.m.

A look at the stock specific triggers that are likely to guide the market today.

Coal India, Indian Overseas Bank, Kajaria Ceramics, Greenply Industries and Uttam Sugar Mills are among 50 companies expected to release their quarterly figures today.

Pharmaceutical company Lupine said on Sunday it had received a warning letter from the US health regulator for its Somerset facility in the United States.

The ESB and NSE will suspend trading in Dewan Housing Finance Corporation Ltd (DHFL) shares effective Monday. This decision, aimed at avoiding “market complications”, comes in the context of the NCLT’s approval of the Piramal group’s resolution plan for the DHFL bankruptcy.

BHEL’s consolidated net loss narrowed to Rs 1,036.32 crore in the March 2021 quarter mainly due to higher revenues. The consolidated net loss of the company was Rs 1,532.18 crore in the quarter ended March 31, 2020.

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