Market Ahead, July 27: Top factors that could guide markets this week

After surging nearly 3 per cent last week, the Indian markets are likely to start this week on a strong footing. The SGX Nifty was trading 45 points higher at 11,217 levels, at 7:10 AM, despite a mixed start in Asian equities where Japan’s Nikkei fell 0.6 per cent but Australia's ASX 200 gained 0.2 per cent. Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan was flat.

This week, domestic equity markets will largely be steered by corporate earnings, developments on US-China relations front and Covid-19 trends. Meanwhile, the expiry of derivative contracts of July series on Thursday may keep the overall trend volatile.

Last week, China ordered the US consulate in Chengdu to be closed, in retaliation for the US closure of the Chinese consulate in Houston following spying allegations. Any further developments in this front will impact financial markets globally. Another major event that markets would track is the US Fed's interest rate decision on Wednesday.

Besides, corporate earnings will be a major trigger for the markets this week with heavyweights like Reliance Industries, HDFC, Maruti Suzuki, State Bank of India, and Bharti Airtel scheduled to announce their quarterly numbers.

But first, investors will react to ICICI Bank's results announced on Saturday. The private lender posted a 36 per cent growth in June quarter net profit to Rs 2,599 crore on robust growth in net interest income and monetisation of stake in subsidiaries.

On the coronavirus front, India's overall cases tally climbed to over 14 lakh on Sunday and the death toll from the virus infection rose to 32,812, according to Worldometer.

Besides, Mindspace Business Parks REIT will today open its Rs 4,500-crore IPO for subscription. The IPO has the price band of Rs 274 to Rs 275 per unit and comprises fresh fund raising of Rs 1,000 crore and offer-for-sale of Rs 3,500 crore.

Moreover, over 12.5 billion new YES Bank shares issued in the follow-on public offering will commence trading from today. Market players said the new shares, issued at Rs 12 apiece, are likely to exert downward pressure on the stock. Already, the stock has lost nearly 30 per cent in the last four trading sessions.

And, now, some other top news.

Sources have told Business Standard that the Mistry family is in talks with several investors to raise up to Rs 4,000 crore by selling part of its stake in Sterling and Wilson Solar, and also with Canadian financial powerhouse, Brookfield, to raise debt against its Tata Sons shares. The proceeds of the funds raised will be used to reduce the group’s debt and repay dues.

Private sector lender HDFC Bank’s Managing Director Aditya Puri has sold 95 per cent of his shareholding in the bank valued at Rs 842.7 crore. Puri held 7.8 million shares in the bank, of which he has sold 7.42 million shares between July 21 and July 23.

Some segments of the financial markets may have moved faster than economic realities suggest, thanks to the stimulus measures taken by global central banks, and this may pose a challenge to financial stability, RBI has said in its Financial Stability Report. Meanwhile, a PTI report suggests that the central bank is likely to go for a minimum 25 basis points cut in key lending rate in the forthcoming MPC meeting scheduled to begin on August 4.