Share market expectations: 7 things you need to know before tomorrow's opening bell
Chitranjan Kumar August 17, 2020
The Indian benchmark indices started the week on a positive note with Sensex and Nifty ending higher on the back of surge in buying in auto and metal stocks. Snapping three sessions of losses, the BSE Sensex ended 173 points higher at 38,050 and Nifty gained 81 points to close at 11,259. On Friday, the BSE Sensex settled 433 points lower at 37,877 and Nifty fell 122 points to end at 11,178. Among the index heavyweights, NTPC, Tata Steel, L&T, Titan and Kotak Bank were among top gainers, while RIL, SBI, HDFC, HDFC Bank, Axis Bank and ICICI Bank were among the top losers. On the sectoral front, all the indices ended higher, barring pharma and PSU Bank, with auto, metal and media indices rallying over 2 per cent.
"Indian indices overcame an uncertain start and traded in a range, before ending the day with gains. Global cues were also mixed due to the delay in the approval of the US stimulus package and mixed economic data coming in from around the world. The markets are trading uncertain and investors are advised to remain cautious. The valuations in the market are a concern, and there could be profit booking in the near term," said Vinod Nair, Head of Research at Geojit Financial Services.
With quarterly earnings of index heavyweights already out, traders will keep an eye on 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.
Here's what you need to know before the share market opens on Tuesday:
Market may see stock specific movement this week as nearly 200 companies are set to announce their quarterly earnings. The list mostly includes midcap and smallcap stocks. Among the important companies whose results will be eyed include Punjab National Bank, Zee Entertainment Enterprises, CSB Bank, Union Bank of India, Muthoot Finance, Oil India, Ruchi Soya Industries, Indian Overseas Bank, and Rossari Biotech.
Traders will also keep a track on US-China trade tensions and development on another stimulus package in the US which is likely to impact market sentiment. Investors remained cautious over the uncertainty regarding the fresh US economic relief, the US-China trade talks and rising coronavirus crisis. Adding to it, the upcoming OPEC meeting will be closely watched.
Coronavirus cases are constantly rising in the country which is forcing economies to reconsider restrictions to contain the spread. India's death toll due to coronavirus infection has crossed 50,000 mark on Monday, with 941 people succumbing to the disease in a span of 24 hours. Coronavirus cases have increased to 26,47,664 with a spike of 57,982 cases on Monday. The total number of recoveries rose to 19,19,843 pushing the recovery rate to 72.51 per cent, the data updated at 8 am showed.
The minutes of the RBI Monetary Policy Committee held between August 4-6 are slated to be released on August 20, while foreign exchange reserves data will be out on August 21.
Globally, US will release FOMC Minutes on August 19 followed by Initial Jobless Claims on August 20 and Markit Manufacturing PMI Flash and Existing Home Sales on August 21.
Shares of telecom companies, Vodafone Idea and Airtel, will react to the outcome of AGR hearing in early trade on Tuesday. The three-Judge bench of Supreme Court, which is hearing the case, reportedly asked the government to share its view on how it plans to recover adjusted gross revenue (AGR) dues of RCom from Mukesh Ambani-controlled Reliance Jio Infocomm (RJIL) and also explain its stand on Jio using spectrum of RCom since 2016.
The USD-INR pair ended flat at 74.89 in another range bound session, compared to previous close of 74.90. There was low volume in the currency market in the absence of any significant triggers globally as the trade talks between world superpowers got postponed indefinitely. Rupee remained range bound during the day's trade despite global dollar weakness and positive equities.
After showing downside breakout of the range on Friday, Nifty witnessed a sustainable counter trend rally on Monday and closed the day higher. A small positive candle was formed with a long lower shadow. Technically, this pattern signals no follow through weakness, after a decline on Friday and this could indicate more upside in the coming sessions, said an analyst at HDFC Securities.
"The short term trend of Nifty is at the verge of shifting towards up, after one day weakness. The formation of negative patterns on Friday is at the edge of negation (on the Nifty moving above 11365). Hence, there is a possibility of further upside in the short term before showing any downward correction again from the new swing highs. Immediate support is placed around 11100-11150 and the key overhead resistance is placed at 11350-11380," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.