Market Ahead, July 6: Top factors that could guide markets this week

Global cues, Covid-19 trends, and quarterly earnings by market heavyweight TCS will be the top triggers for the equity markets this week.

On the earnings front, TCS will kick off the June quarter results season on Thursday. Besides, South Indian Bank and Karnataka Bank will also announce their Q1 results this week. Meanwhile, 116 other companies, including IRCTC, Dish TV, and Future Consumer are scheduled to announce their March quarter numbers during the week.

However, concerns over rising coronavirus cases as well as tensions between US-China and India-China remain key risks for the equity markets.

India overtook Russia to now become the world's number three in coronavirus case count with nearly 25,000 new cases added on Sunday, according to Worldometer. The number of positive cases now stands at over 6.97 lakh with death toll is at 19,700. The global case load from the deadly infection has exceeded 1.1 crore. On the other hand, the increasing rate of recovery might allay some of the investor concerns. Hence, the trend in the Covid-19 cases and newsflow on potential vaccine front will remain key monitorables for investors.

Apart from this, investors will also monitor movement of rupee and crude oil as well as progress of monsoon. Besides, they will also eye IIP data which is scheduled to be announced post-market hours on Friday. India's factory output contracted by a record 55.5 per cent on a year-on-year basis in April due to the complete lockdown imposed that month to prevent the spread of Covid-19.

And, in the end let's see what the global cues and technicals are saying about the Indian markets today. 

At 7:10 AM, SGX Nifty was trading more than 50 points higher at around 10,630 levels, indicating a higher opening for the Sensex and Nifty today. This comes on the back of firm trend in Asian shares which held near four-month highs on Monday. Japan's Nikkei gained 1.2 per cent while Hong Kong's markets were last up 1.5 per cent. South Korea's Kospi also rose 1 per cent. Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.05%, having hit its highest since February.

In commodities, oil prices were mixed in early trade with Brent crude futures up 15 cents at $42.95 a barrel.

On the technical front, the benchmark Nifty gained 2.2 per cent last week to end at a four-month high of 10,607. Analysts say the Nifty has formed a bullish pattern on the weekly charts and is headed towards 10,700-10,800 range, which is a key resistance zone. On the downside, it has good support at 10,500-10,400 levels.

Read by Kanishka Gupta