Market Ahead Podcast, May 31: Factors that could guide markets this week

The market traded on an upbeat note last week, with Nifty making a new record high after spending nearly three months in a corrective phase. Analysts expect this momentum to sustain as fresh Covid cases continue to decline, and amid hopes of unlocking of the economy.  

Going into the trade this week, the MPC's interest rate decision, a host of macroeconomic data announcements, Covid-19 trends and global factors would be key market driving forces.

The consistent fall in fresh coronavirus cases in the country is boosting investor sentiment as the risk arising from Covid is steadily subsiding. In the last 24 hours, India reported 1.53 lakh cases. On Sunday, the fresh cases stood at 1.65 lakh and on Saturday at 1.73 lakh.

Amid the declining trend in fresh cases, investors would await announcements on how the state governments plan to unlock, which would further decide the market trend.

A lot of important macroeconomic data and events are lined up this week. On the macroeconomic front, GDP data for the March quarter is slated to be out on Monday along with the core sector data for April. The Markit Manufacturing PMI and Markit Services PMI data will be released on Tuesday and Thursday, respectively.

Besides, monthly auto sales numbers will also start pouring in from June 1. Analysts expect sales volumes to be hit by the second Covid-19 wave and lockdowns across states.

Importantly, the RBI monetary policy committee (MPC) review meeting outcome is scheduled to be out on Friday, June 4. While the expectations are ripe that RBI MPC will maintain its accommodative stance, investors will look out for the central bank's assessment of the impact of the Covid wave on GDP growth.

That apart, we are now in the last leg of earnings season and companies like ITC, Aurobindo Pharma, Bharat Forge, PVR and Motherson Sumi will announce their quarterly numbers along with several others during the week.

And lastly, oil price movement, FII flows and the rupee's trajectory versus the dollar are also likely to influence market sentiments.

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

Most Asian stocks retreated and US equity futures were steady as investors continue to weigh inflation risks and the strength of the economic recovery. Equities slipped in Japan, Hong Kong and China, where a gauge of the manufacturing industry suggested the economy’s recovery momentum might have peaked.

Japan's Topix index fell 0.6%, Hang Seng Index fell 0.4% and Shanghai Composite Index fell 0.3%.

Tracking weakness in Asian peers, Indian markets too eyed a tepid start. SGX Nifty was ruling 48 points down at 15,444 around 7.35 am.

A look at the stock-specific triggers that are likely to guide the market today.

Aurobindo Pharma, Chemcon Speciality Chemicals, Astron Paper & Board Mill, Jamna Auto Industries and Uttam Galva Steels are among 79 companies slated to post their quarterly numbers today.

Bank of Baroda reported a standalone net loss of Rs 1,047 crore in the quarter ended March 2021, as it shifted to a new tax regime. The lender had reported a standalone profit-after-tax of Rs 507 crore in the year-ago period.

Mobile advertising firm Affle (India) posted a nearly three-fold jump in consolidated profit at Rs 58.7 crore for the quarter ended March 31, 2021. The company had posted a net profit of Rs 20 crore in the same quarter a year ago.

Drug firm Divi's Laboratories reported a 29.30 per cent YoY rise in its consolidated net profit to Rs 502.02 crore for the quarter ended March 31, 2021, on account of robust sales.

Suzlon Energy on Saturday said Himanshu Mody is appointed as its new Chief Financial Officer from August 1, 2021.