Market Ahead, June. 1: Top factors that could guide markets this week

Investors will first react to the government's decision to extend lockdown in containment zones till June 30 and the Q4FY20 GDP data announced during the weekend.

India's economic growth fell to 17-year low of 3.1 per cent in the fourth quarter of FY20, with private investment and manufacturing hit hard. This pulled down the GDP growth for the entire 2019-20 to an 11-year low of 4.2 per cent.

On Saturday, the government also extended the nationwide lockdown in containment zones till June 30, while allowing malls, hotels, religious places to open from June 8. The Centre has also allowed unrestricted movement of persons and goods inter and intra-state in the first phase of the reopening.

Meanwhile, India registered more than 8,000 new coronavirus cases in the last 24 hours. The country's tally now stands at 190,609 cases.
 

Besides, investors will also track global cues, corporate results, and macro numbers.

The developments on the US-China front will remain a key focus for investors throughout the week. In the latest move, US President Donald Trump announced that the US will end special treatment of Hong Kong in response to Chinese imposition of new controls. Any further escalation in the US-China tensions will remain a major headwind for the global markets. For Monday, Asian share markets started on a cautious note and MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent, as did Japan's Nikkei. SGX Nifty, which is up 130 points, is indicating a stronger opening for the Indian indices today.

In commodity markets, Brent crude futures were off 0.55 per cent at $37.63 a barrel.

Apart from these, the corporate earnings season is also heading towards its conclusion. This week, largecaps like the State Bank of India, Larsen & Tourbo, Britannia Industries, and BPCL, among others are scheduled to announce their March quarter results.

Besides, market participants will also keenly track the auto sales for the month of May which will start pouring in from today. After a washout April, May is expected to show some improvement on a sequential basis given the certain relaxations allowed by the government throughout last month. On a YoY basis though, automobile companies will show huge declines in sales.

In terms of macro data, the PMI manufacturing data for May will be announced today while the data for the services sector will be out on Wednesday. In April, Services PMI had contracted to a record low of 5.4 while manufacturing PMI was down to 27.4.

And in the end, shares such as Abbot India, Ipca Laboratories, and Jubilant Foodworks are likely to remain active in today's session as the re-balancing of MSCI indices will become effective from today.

Read by Kanishka Gupta