The week ahead – June 7th to 13th 2020 for Indian Markets, Foreign issues and Covid19 Status
Last week has shown some sentiment revival on the market. The market in the five trading sessions have moved high and the data show that this was the biggest weekly gain for Indian markets since 2017. The main catalyst being the revival of economic activity across the country after removing lockdown and allowing certain operations to run across the country with limiting few only in containment zones.
As we have already reported in our article last Sunday, that the removal of lockdown may be a positive sign for the market and investors will take this chance to get into the market. And as expected the market was on the rally.
The below are the stories that are of Interest in the coming days.
Jio has got another investment from Silver lakes. For the past few weeks, the company is on a spree of foreign tech giants investing in the technology platform. The latest investment was an addition to the already invested amount by silver lakes. The previous investment was from Abu Dhabi’s sovereign investment fund Mubadala Investment Co. In the past 6 weeks, the company has received more than 90,000 crores from different investors.
In addition to the investment in JIO, Reliance rights issues was also a success for Reliance Industries. The rights issue was oversubscribed 1.5 times and make it the largest rights issue till date in India. This comes as the vision of Mukesh Ambani as he tries to make Reliance Debt free by the end of 2020.
Covid19 cases growth in the country will remain as the top topic of the state. With the count of cases increasing continuously, India has become the 6th largest country in terms of the number of cases. This will have a negative impact on the market on Monday. The market may likely react to the increase in case count.
And also a graphic has been circulated on social media regarding the lift of lockdown in different countries. Though we cannot authenticate the graphics data, we find the data to be true to believe. The data tells that most of the countries have lifted the lockdown only after there is a situation of the graph of a number of cases decreasing. But it is in case of India, even if the number of cases is increasing daily, the lockdown has been lifted and operations are slowly being allowed across the country. This might be assumed to impact negatively on the market for the first few trading session in the next week.
Several investors believe that the main catalyst for the past week’s rally was Fear of Missing Out (FOMO). To be clear in simple terms, the bulls entered the market not to miss the chance of buying at discount. But which the market comfortably placed for the buyers of last week, there may be profit booking that will be seen in the coming days. So we have to watch and see if Bulls can face the feared selling activity.
IMD has informed that this year the rainfall will be 102%. This is some kind of positive news for the agriculture sector. The monsoon has already started last week in Kerala. So this will impact positively for the agriculture stocks.
Government is also trying all ways possible to start all industries and service to resume the economy with proper guidelines. This will work as a catalyst for the market rally. If proper resumption of offices has been observed in the next week, then the market is likely to respond to that.
GST Council is scheduled to meet in video conference on June 12th headed by Finance minister Nirmala Sitharaman. The council is to discuss the effect of corona virus on revenues and the plan ahead. Steps to be taken to compensate the loss of revenue in GST due to corona virus and the method to compensate states for the loss in Taxes. The outcome of the meeting will a situation to keep an eye.
Last week there is an increase in the foreign institutional investment in India. This is an indicator of positive sentiment from foreign investment after unlocking the economy last week. This week a watch to be kept on the FII data to understand the outlook on the market.
Coming to the Revenue reports to be published in the next week, companies like Hero MotoCorp and Mahindra are expected to announce quarter 4 results. The results will decide the stock rally of that particular company and also possibly the sector.
us china trade relation will be a hot topic that determines the market conditions. Constant moves by President Trump will affect the Indian markets. And also the Border dispute with China and Nepal will be a situation to keep an eye. for the past few weeks, the tension in the border areas is high and the army is gearing up and preparing all the ways possible to counter any situation about to arise.
Updates to keep an Eye this week
- Coronavirus statistics and Reopening of Economy
- Indo china relations and trump actions
- GST Council Meet
- Quarterly results.
- Identifying Fear full profit-booking by buyers of last week.
We keeep updating this article through out the week when certain issue is believed to affect the market condition. Please keep a watch on the article.
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