The Indian benchmark equity indices - Sensex and Nifty - ended lower for a third consecutive session on Friday tracking muted cues from global markets as investors turned cautious over weak macro data. The The S&P BSE Sensex ended 129 points lower at 37,606 and NSE Nifty50 fell 28 points to 11,073. Overall, Sensex and Nifty rallied over 7 per cent each in July despite profit-taking in the last week. Sensex and Nifty declined 1.37 per cent and 1.08 per cent, respectively, during the week ended July 31.
Going ahead, the market may see some correction amid uncertain environment in wake of rising coronavirus cases. With earnings announcement by index heavyweights are already out, investors will keep an eye on RBI policy, macro data, US-China tensions and coronavirus cases which will set tone for the markets. Development in global markets will also be watched closely by the traders.
On Nifty's outlook, Jimeet Modi, Founder & CEO Samco Group said," Selling pressure in Nifty50 at higher levels and weakness in Bank Nifty is likely to drag the benchmark indices lower. We maintain a bearish outlook going ahead and believe a retest of 10600 is a possibility within a couple of weeks."
Here's what you need to know before share market opens on August 3.
RBI policy announcement
The street will keep a close eye on the RBI Monetary Policy Committee (MPC) meet next week which will decide the policy stance amid the urgency to revive the coronavirus-hit economy and increased demand for one-time loan restructuring by industry chambers. Experts are, however, divided over the possibility of another rate cut by the RBI in its forthcoming policy arguing that one-time loan restructuring was more essential at this juncture to tide over the COVID-19 situation. The MPC is slated to meet for three days beginning August 4 and announce its decision on August 6.
Auto major Mahindra & Mahindra, drug makers Lupin and Cipla along with more than 300 companies are scheduled to announce their June quarter earnings this week. The list mostly include midcap and smallcap stocks.
Auto stocks will remain in focus after July auto sales numbers by index heavyweights Maruti, M&M and Hero MotoCorp showed a solid bounceback.
Trader will also keep an eye on Markit India Manufacturing PMI on Monday and Services PMI on Wednesday which will give some clue about health of the economy. India Services PMI rose to 33.7 in June 2020 from 12.6 in the previous month, while Manufacturing PMI was at 47.20 as compared with 30.80 in May.
Traders will also keep a track on macroeconomic data by the US. The world's largest economy will release PMI data followed by factory orders, balance of trade, jobless claims during the week.
Investors will also watch movement in Brent crude oil during the week, with OPEC mulling on reversing some of the output cuts started earlier this year heading into August.
COVID-19 cases are constantly rising in the country which is forcing economies to reconsider restrictions to contain the spread. India's COVID-19 tally crossed the 17-lakh mark on Sunday, just two days after it went past 16 lakh, with 54,735 cases being reported in a day, while the recoveries crossed the 11-lakh mark, according to the Union Health Ministry data. The total coronavirus cases surged to 17,50,723, while the death toll climbed to 37,364 with 853 people succumbing to the disease in a day, the data updated at 8 am showed. The recoveries have mounted to 11,45,629, while there are 5,67,730 active cases of coronavirus infection in the country presently.