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Fed rate call, Covid-19 cases, Q4 results among 7 factors guiding market this week

Gradual opening up of the economy after Covid-19 lockdown and global cues to decide outlook.

, ETMarkets.com|
Last Updated: Jun 07, 2020, 01.33 PM IST
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MUMBAI: Easing lockdown helped the markets log gains for the second week in a row, even as daily record surge continued in Covid-19 infections in the country.

The outlook for the coming week primarily hinges on the developments related to the spread of Covid-19 infections as the economy opens up gradually, and global cues. The US Federal Reserve is set to meet next week to review policy rates.

Here is a look at the factors that may influence the market in the next week:

Escalating US-China tensions: The rising tensions between two economy powerhouses will weigh on the world markets. The United States said on Friday it will permit Chinese passenger air carriers to operate two flights per week after Beijing said it would ease coronavirus-related restrictions to allow in more foreign carriers, Reuters reported. On Wednesday, President Donald Trump’s administration said it planned to bar all Chinese passenger airlines from flying to the United States by June 16 due to Beijing’s curbs on US carriers amid the pandemic.

Q4 Earnings: Companies such as Inox Leisure, Chalet Hotels, PVR, Titan Bombay Dyeing, Hero MotoCorp, Indian Hotels, Mahindra & Mahindra, BHEL are due to report their March quarter earnings next week.

Rising coronavirus infections: India has overtaken Italy and is now the sixth-worst nation to be impacted by the coronavirus pandemic. The coronavirus pandemic in India grew by the highest number yet again on Saturday when 9,887 fresh cases were detected in the last 24 hours taking the total number of patients in the country to 236,657.

Easing Lockdown: It remains to be seen how the government goes ahead with easing the lockdown in light of the record rise in infections. Shopping centres, places of worship, restaurants and offices will be allowed to reopen from Monday. The health system in cities such as Mumbai is brimming at full capacity and is on the verge of collapse while hospitals and few other hotspots in the country are running out of space.

Domestic macro data: Industrial production data for April is due on Friday. India's industrial production plunged 16.7 percent year-on-year in March 2020, and was much worse than market expectations of an 8.7 percent tumble, as the Covid-19 pandemic forced many businesses to close. On the same day, the Consumer Price Index (CPI) for May will also be released. India's retail price inflation was revised lower to 5.84 percent year-on-year in March 2020, from a preliminary estimate of 5.91 percent. That was the lowest rate since last November, as prices rose at a softer pace for food & beverages and miscellaneous, while inflation was virtually unchanged for clothing & footwear.

Overseas macro data: The US Federal Reserve’s two-day meeting, ending on Wednesday, will be the first since April when Fed Chair Jerome Powell said the US economy could feel the weight of the economic shutdown for more than a year. The meeting will follow a surprise gain in the Labor Department’s closely watched jobs report on Friday that pushed benchmark 10-year Treasury yields to the highest since early March, Reuters reported.

Optimism on RIL deals: The optimism on oil-to-telecom conglomerate Reliance Industries’ (RIL) seventh deal for Jio Platforms is likely to spill over to the next week as well. The index heavyweight scaled record high on Friday, and analysts see more steam to the rally.
(What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)
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