Week Ahead – what will impact the market next week.
Indian indices have continued to be on the positive move last week. Both Sensex and Nifty ended in positive in the last week that ended on June 26th. Now the cases of covid19 are continuously increasing over the week and in many days, the daily count has hit a new high. Still, investors are of the view that it is the right time to enter the market and hence bull are taking over the market.
In the coming week we expect a positive outlook with a probability of high volatility because of few cases that need to be continuously observed.
In the last week many major companies have also announced their quarterly results which even affected the market in some manner.
Now, this week expectedly marks the end of lockdown in India and starting from July their is more or complete relaxation for the economic activity in the country. this is another positive aspect that will help the indices to move forward. There is also the voice that is spreading in the news about the possible another economic stimulus package from the government. If announced will help companies and other economic activities recover at a faster rate and is a positive force for the market.
But experts feel that the present levels of markets are might be the top level for the present positive news that is available. Hence in the coming weeks, the market may see some consolidation and hence traders are to be very cautious to respond to any movement in the market. Now the reopening of economic activities across the country from July 1st is the voice that might have a positive effect on the market movement. Hence en eye is to be kept on the announcement from the centre on the next phase lo lockdown or opening of economic activities. Any restriction more will be a negative force on the sentiment of the investors
Another scenario that will affect the market is the tensions between India and China which existed from the last faceoff at galwan valley which resulted in the Marty of 20 Indian soldiers and unknown Chinese Troops. The government have already started to analyze the prices of different products that are imported from China and the price of the same domestic manufactured products to reduce the imports from the market. I may in the coming days take more steps to increase domestic market production. And it is already in the news that China is increasing its military base in the galwan valley and any face-off across the LOC between the forces is a thing to be observed in the coming weeks.
Now when there is a piece of sensitive news on the Indian Chinese relations, then the most important factor to be observed is FPI sell-off. Now in the past weeks, we have been highlighting that the most important force for the market to move in the upward direction is the incoming FPI. But because of the Border tension, is these FPI take a sell-off decision in Indian markets, this will make the market move in the downward trend. Domestic investors cannot sustain this sell-off and in any forward movement or downward movement, FPI plays an important role.
Factors to watch in the coming week
Increasing Coronavirus cases is an important thing to be observed. In the past few months, COVI19 is one thing that affected the market daily. Now the market is slowly adjusting to the new normal that is increasing in the cases continuously and the Markets are opening to live with the COVI19. In the last week, Patanjali has announced a medicine what it claims is that it can cure Corona affected patients. The medicine is named as coronil and is advertised by the Company largely for one day. Eventually, the government has stepped in to analyze the drug and see if it can actually cure the disease.
The government has reportedly asked the company to share the details of the drug and stop advertising that it will cure COVID19 until further investigation. Now it is also revealed by the government that the company has secured a license for Immunity booster and has not granted any license to manufacture covid19 drug. For now, the drug is in the investigation by the government agencies about its potential. In parallel, many other countries are claiming about a different drug that is potentially one in curing the COVID19 patients. Keep on eye on the news about covid19 and other details such as a possible second wave which will affect the economies in a bad manner.
Now June 30 is the end of what is named as Unlock 1.0, and the government is expected to announce Unlock2.0 which will expectedly resume all economic activities. But there is a constant increase in the number of covid19 cases in the country with the daily count reaching new targets each day. So the government is observing the situation and may announce any possible decision any time soon. So this news will affect the market.
The government has already said that there is no official confirmation about the probable complete lockdown as claimed by some fake news that is spreading in the social media. But it is wise to keep an eye on the restrictions that may be announced by the government to curb the increasing cases in the country.
March quarter earnings are announced by many companies over the last week and many more companies will be releasing the results in the coming week.
Around 1,420 companies are expected to announce their quarterly earnings this week. Of these, 1,408 companies will declare earnings in the first two days of the week — June 29 and June 30. Most of these are midcaps, small caps and penny ones. Key earnings to watch out for would be ONGC, Vodafone Idea, Bharat Forge, Bharat Electronics, Petronet LNG, Central Bank of India, MRF, Force Motors, GIC Housing Finance, GMR Infrastructure, Phoenix Mills, Raymond, Shree Renuka Sugars, Deepak Fertilisers, Dish TV, Future Consumer, Godfrey Phillips, HCC, ICRA, Mishra Dhatu Nigam, NBCC, New India Assurance Company, PC Jeweller, RITES, RPP Infra Projects and SAIL, among others.
Now the June auto sales are also to be observed. In April we have seen a complete washout of the sales because of the lockdown. In May we have seen some positive sales. June is also expected to see some more increase in sales. The auto sector indices will be affected by this.
Crude oil prices have also recovered and consolidated in the range or $40. this is a positive news for India, as India is a major importer of Crude oil.
We thought of the positive view will expect consolidation in the present levels until unless some strong domestic positive news is available for the market to move in the upward trend. Already the market is comfortable placed for the present available news and market scenarios.
We consistently update this article for this week highlighting the events in the next week that are or major importance. So keep an eye at Week Ahead.
Until then see you in next article..