Market Ahead Podcast, August 16: Factors that could guide markets this week

In the absence of any major domestic trigger, the markets will dance to the tunes of global peers in this holiday-shortened week. Equity markets would remain closed on Thursday, August 19 for Muharram. Analysts say the market is expected to remain bullish in the long term while the possibility of a short correction in the near term cannot be ruled out. 

The June quarter earnings season is largely over, except for a handful of small firms slated to post their numbers. And on the macroeconomic front, the WPI data will be released on August 16. But since the retail inflation eased in June, the wholesale price inflation data is also expected to cool down from June’s level of 12.07 per cent. Analysts believe markets are likely to consider it as a non-event.

Further, four companies will list on bourses on Monday, namely Devyani International, Windlas Biotech, Krsnaa Diagnostics, and Exxaro Tiles. After a muted response to the IPOs of Chemplast Sanmar, Nuvoco Vistas and Aptus Value, investors are keenly eyeing how these firms perform on listing to understand if the euphoria among retail investors is easing.

Oil price movement, FII flows and the rupee's trajectory versus the US dollar can further sway market moves. Lastly, focus will also remain on the US FOMC minutes due on Wednesday, August 18.

And now, let's take a look at the trade setup for today.

Benchmark indices eyed a tepid start to the day as the global trend was weak. Further stock-specific activity could be seen as Street reacts react to the quarterly numbers reported post market hours on Friday and on Saturday. At 7.30 am, SGX Nifty was down 32 points at 16,496.

On the global market front, US equity futures and most Asian stocks slipped as the delta virus strain hampers economic reopening and as traders await key Chinese data that may signal slower growth.

Japan’s Topix index dropped 1.5 per cent, Australia’s S&P/ASX 200 Index shed 0.4 per cent and Hong Kong’s Hang Seng Index lost 0.3 per cent. S&P500 futures were down 0.2 per cent.

On the stock-specific front, Vodafone Idea shares will be in focus as the debt-ridden private telecom company posted a lower consolidated loss of Rs 7,319 crore for the first quarter ended on June 30, 2021, against Rs 25,460 crore loss in the same quarter a year ago.

Oil and Natural Gas Corp (ONGC) net profit soared by nearly 800 per cent in the first quarter of the current fiscal after more than doubling of oil prices compensated for a fall in production. Net profit in April-June at Rs 4,335 crore was 772.2 per cent higher than Rs 497 crore in Q1 of previous fiscal.

Future Retail on Saturday reported widening of its consolidated net loss at Rs 1,147.28 crore for June quarter 2021-22, impacted by the second wave of the pandemic. The company had posted a net loss of Rs 552.91 crore for April-June period a year ago.

State-run SJVN announced that it has bagged 200 MW grid connected solar PV power project worth Rs 1,000 crore in Bihar.

RattanIndia Power reported widening of its consolidated net loss to Rs 824.42 crore for the June quarter. It had logged a consolidated net loss of Rs 450.78 crore in the quarter ended June 30, 2020.