Share market expectations: 5 things you need to know before opening bell on Wednesday
BusinessToday.In August 18, 2020
Indian benchmark indices, Sensex and Nifty, continued their gaining streak for the second straight session on Tuesday on the back of surge in buying in banking, cement, realty and media stocks despite mixed global cues. Extending previous session's rally, the BSE Sensex ended 477 points higher at 38,528 and Nifty added 138 points to settle at 11,385. On Monday, Sensex had gained 173 points to close at 38,050 and Nifty had added 81 points to end at 11,259. Among the index heavyweights, UltraTech Cement was the top gainer, followed by Kotak Bank, ICICI Bank, Asian Paints, Tata Steel, Reliance Industries and HDFC Bank. On the flip side, Tech Mahindra, HCL Tech and Bajaj Auto were among top losers. On the sectoral front, all the indices, barring pharma, ended in green with realty, media and financials indices rallying between 2-4 per cent.
"Indian benchmark indices kept gaining strength during the course of the day, as opposed to mixed global market cues. US-China political tensions and the uncertainties over the US stimulus package kept global markets on edge. In India, investors took comfort in the expectation of government spending to offset the impact of the lockdown and the progress of the monsoon and its relation to the rural economy also improved sentiments," said Vinod Nair, Head of Research at Geojit Financial Services.
"Gains were led by the banking index. With liquidity and expectations overcoming concerns about valuations, any consolidation in the markets have been bought into and this trend is expected to continue," he added.
As major corporate earnings announcement have already been out, investors will keep an eye on domestic and global events along with developments on coronavirus front, which will set trigger for the stock market.
Here's what you need to know before share market opens on August 19.
Earnings announcements and macro data
More than 100 companies are set to announce their quarterly earnings this week, which mostly includes midcap and smallcap stocks. The important companies whose results will be declared this week include Punjab National Bank, CSB Bank, Union Bank of India, Muthoot Finance, Oil India, Ruchi Soya Industries, Indian Overseas Bank, and Rossari Biotech.
Traders will also keep an eye on the minutes of the RBI monetary policy panel meeting which will be released on August 20. The foreign exchange reserves data will be released on August 21. On the global front, the 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.
Globally, European markets closed lower on Tuesday on concerns over the coronavirus pandemic and rising tensions between the US and China. Meanwhile, US stocks were trading higher as investors awaited further developments on economic relief and US-China trade relations. Apart from this, the upcoming OPEC meeting will be closely watched.
The Indian equity market has been under pressure as the country struggles to contain COVID-19, which is impacting economic activities. India's tally has crossed 27 lakh mark with a spike of 55,079 cases on Tuesday, as per the Union Health Ministry data. The total number of recoveries rose to 19,77,780 pushing the recovery rate to 72.17 per cent. On the other hand, COVID-19 related fatalities in India have climbed to 51,197 with 876 people succumbing to the disease in a span of 24 hours.
Telecom stocks, Vodafone Idea and Airtel, will continue to remain in focus as the Supreme Court adjourned the hearing on the issue of adjusted gross revenue (AGR) dues from telecom companies to Wednesday. The three-Judge bench led by Justice Arun Mishra on Tuesday heard arguments from Reliance Jio pertaining to the sale of the spectrum by the bankrupt companies RCom and Aircel. The apex court had earlier indicated that entities using the spectrum must discharge the AGR dues.
Tracking positive cues from equity market, the Indian rupee closed at a one-month high against the US dollar. The local currency ended 13 paise higher at 74.76 against the US dollar, against its previous close of 74.89. The Indian unit was also supported by sustained foreign fund inflows coupled by weak US currency.