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

In the week gone by, D-Street witnessed massive selling pressure amid a spike in bond yields and inflation fears and ended over 3% lower. Interestingly, the broader markets continued to outperform the benchmarks wherein both the indices ended in the green.

This week marks the beginning of a new month and a slew of factors such as long-term bond yields, macro-economic data, crude prices movement, auto sales figures and FII flows will guide the market trajectory. Besides, market participants would keep a close watch on the coronavirus situation in the country.

Analysts expect a further decline in the benchmark indices and expect volatility to remain high this week.

When the markets would open today, first and foremost, they are likely to react to the Q3 GDP print that came out post-market hours on Friday. While India managed to swing back in the green with a 0.4% rise in the GDP after two consecutive quarters of decline, a downward revision of FY21 GDP in the second advance estimates to -8% could disappoint Street.

On the economic front, Markit Manufacturing PMI and Market Services PMI data are scheduled to be out on March 1 and March 3, respectively and would be closely tracked by investors.

Besides this, the auto sales figures would start trickling in from March 1 onwards. Car and tractor makers are likely to report a strong set of auto sales numbers for the month of February, but growth in two-wheeler sales may not be as strong, according to analysts. Stock-specific action is expected in the auto companies on the back of these numbers.

Investors and traders would also closely track the Covid situation in the country as some states are witnessing a spike in infections. India, this week, will kick off the next stage of Covid vaccination as it looks to inoculate citizens aged 60 and above and those over 45 with comorbidities. In the last 24 hours, India recorded 16,752 cases and 113 deaths.

Going ahead, the rising bond yields will continue to remain a key concern for equity markets worldwide and investors would keep an eye on them.

That apart, movement in crude oil prices, FII flows and rupee trajectory vs the US dollar are among other key guiding factors. The OPEC and its allies including Russia are scheduled to meet on March 4 and their decision could give a fresh direction to crude prices that are hovering near pre-Covid levels.

Lastly, in the IPO market, MTAR Technologies' Rs 597-crore initial public offer will open for subscription between March 3 and 5. The price band for the issue has been fixed at Rs 574-575 per share.

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

Asian shares firmed on Monday as some semblance of calm returned to bond markets after last week’s wild ride, while progress in the huge US stimulus package underpinned optimism about the global economy. Also helping sentiment was news deliveries of the newly approved Johnson & Johnson COVID-19 vaccine should start on Tuesday.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1%, after shedding 3.7% last Friday. Japan’s Nikkei rallied 2.0%, while NASDAQ futures bounced 0.8% and S&P 500 futures 0.7%.

Tracking the upbeat global mood, the Nifty futures on SGX were trading 227 points or 1.57% higher at 14,752, indicating a gap-up start for benchmark indices back home.

On the stock-specific front, Affle India at its board meeting approved the fundraising of upto Rs 1,080 crore.

Indian Oil Corporation will invest Rs 32,946 crore to expand Panipat refinery capacity to 25 million tonne per year from 15 million tonne per year earlier.

UK's development finance institution CDC Group has pruned its stake in Equitas Holdings Ltd by 2.61 per cent through sale of over 89 lakh shares in open market earlier this week, according to a regulatory filing.

Vedanta Resources has raised $1.2 billion in a bond offering that saw strong investor interest.

Adani Group firms Adani Green Energy (AGEL) and Adani Transmission (ATL) on Saturday announced release of pledge on equity shares by their promoters Gautam S Adani and Rajesh Adani on behalf of SB Adani Family Trust. Adani Group stated in a BSE filing about "release of pledge on 10,00,000 equity shares of AGEL and Release of pledge on 1,38,21,355 equity shares of Adani Transmission".

Reliance Strategic Business Ventures, a wholly-owned subsidiary of Reliance Industries, has acquired an additional equity stake in its investee company skyTran Inc. for a consideration of $26.76 million.