Despite volatility in the last few sessions, Sensex and Nifty managed to close positively for the week, buoyed by better-than-expected June quarter earnings and signs of hope in COVID-19 vaccine development.
On Friday, Sensex closed 11 points lower at 38,128 and Nifty fell 21 points to 11,194. As opposed to weak Asian and European stock markets, domestic markets closed higher, suppressing concerns over surging domestic coronavirus cases. Good June quarter earnings numbers and FII participation have kept domestic investors buoyed in the last week, experts suggested.
Amid less participation from broader indices, market analysts have turned cautious for the coming week.
Here are the top 5 factors that will lead the stock market in the upcoming week:
Besides concerns over the rising spread of coronavirus, the ongoing global cues will continue to dictate the market trend. Gains were under check by the concerns of worsening tensions between Washington and Beijing.
Asian shares and US stock futures bounced back on bearish trend on Friday and slipped from five-year highs, followed by over 3 per cent drop in China's Shenzhen stocks amid rising US-China tensions.
China announced on Friday that it's revoking the licence for the US consulate general in the southwestern Chinese city of Chengdu, following earlier reports of US demanding the closure of the Chinese consulate in Houston. Following weak cues, European markets also dropped over 1 per cent each.
Vinod Nair, Head of Research at Geojit Financial Services said, "Global markets were also affected on account of rising US-China tensions. Markets head into the weekend with this uncertainty in mind, after a quid pro quo from the Chinese government. Any further developments in this front will impact trade for next week".
Mindspace Business Parks REIT IPO
Mindspace Business Parks REIT (Real Estate Investment Trust), jointly owned by K Raheja group and Blackstone, is all set to launch its Rs 4,500 crore initial public offering (IPO) this week. The IPO opens for subscription between Monday to Wednesday with a price band of Rs 274-275 per unit. As per documents filed with the SEBI, the Rs 4,500 crore Mindspace IPO consists of a fresh issue of units aggregating up to Rs 1,000 crore and offer for sale (OFS) of units of Rs 3,500 crore.
The finalisation of the basis of allotment will be processed on August 6, while the initiation of refunds will be done on August 7. The credit of shares to Demat account will also take place on August 7. Post the IPO, equity shares of the REIT will be listed on both BSE and NSE on August 12, 2020 (tentative date).
In recent trades, the challenges with respect to rising COVID-19 cases and recovery of economic growth and any extension or resetting of lockdown measures have added to the worries and kept investors cautious.
India's COVID-19 tally climbed to 13,85,522 on Sunday with 32,063 deaths. Total active cases stood at 4,67,882, while 8,85,576 recoveries were reported.
Meanwhile, there are currently 16,223,842 confirmed cases and 648,819 deaths worldwide from the coronavirus COVID-19 outbreak as of today.
Investors will keep an eye on the shares of big companies that are scheduled to declare their April-June quarter figures this week.
Ajit Mishra, VP-Research, Religare Broking, said, "In the coming week, schedule derivatives expiry of July month contracts combined with the on-going earnings season would keep the volatility high. A long list of prominent names like Kotak Bank, Tech Mahindra, Bharti Airtel, Ultratech Cement, Dr Reddy, Maruti, HDFC, Reliance, IOC and SBI will be announcing their numbers during the week along with several others."
Monday: BEL, Bharti Infratel, India Cements, Kotak Mahindra Bank, Marico, Nippon AMC and Tech Mahindra
Tuesday: Nestle India and UltraTech Cements
Wednesday: Bharti Airtel, Dr Reddy's Labs, IndiGo, Maruti Suzuki and TVS Motor
Thursday: Dabur and RIL
Friday: Indian Oil and SBI
During the week, the 30-share BSE index Sensex and NSE Nifty 50 gained 3 per cent and 2.6 per cent, respectively. Both indices have gained more than 33 per cent each since India first went into lockdown in late March. Meanwhile, volatility index INDIA VIX rose marginally by 1.56 per cent to 24.53 level on a weekly basis.
On Nifty's outlook, Jimeet Modi, Founder & CEO of Samco Group, said, "The divergence between Nifty and BankNifty is going on for last three weeks. We continue to maintain a cautiously bullish outlook on Nifty with immediate support and resistance placed at 11,000 and 11,240 respectively. However, a break below 10,900 may lead to short-term weakness."
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking, said, "As we step into the monthly expiry week, our eyes would be on a few crucial levels. On the upside, 11,250 is the level to watch out for; whereas, 11,050 has now become key support. As an optimist, one should remain hopeful as long as we are trading above this swing low (11,050) and expect the market to give breakout in an upward direction to extend the move towards 11,350-11,400. However, a breach of lower end should be treated as a short-term pause to see some decent profit booking."