Market Ahead Podcast, May 3: Top factors that could guide markets this week

After a buoyant last week wherein the markets logged a gain of 2%, analysts expect the market to trade in a narrow range amid multiple conflicting cues on the economic and political front. Furthermore, March quarter earnings, macro data and Covid-related developments will also be closely tracked by market participants. Volatility is expected to remain high in the events-heavy week.

First and foremost, Street will react to the Reliance Industries results which came in after market hours on Friday. Moreover, earnings season will gather pace with some 125 companies slated to post their March quarter numbers this week, including bluechip names like Kotak Mahindra Bank, Hero MotoCorp, Adani Ports, Tata Steel, Dabur and HDFC.

Investors might also react to the Assembly election outcome that came on May 2. While the market will be disappointed with BJP's inability to breach TMC's citadel, it will take comfort that the BJP has been able to retain power in Assam, said independent market expert Ajay Bodke. The impact of these wins by the TMC and DMK on the constitution of the Rajya Sabha will be closely watched as the NDA needs to command a majority there to pass crucial legislative bills to accelerate economic reforms, he added.

Experts are also of the opinion that more than election outcome, which will have a new value of a few hours, Covid-19 related developments will have a greater market impact. As India crossed the grim milestone of over 4 lakh cases reported in a single day, investors fear the possibility of a nationwide lockdown. Meanwhile, they will also guide the pace of vaccination drive that has now opened for all adults, albeit with some initial hiccups.

In spite of Covid related restrictions, GST collections for April were at a record Rs 1.4 lakh crore. This might soothe investors concerns over the impact of localised lockdowns on economic activity. That apart, investors will also track Markit Manufacturing PMI and Markit Services PMI data scheduled to be out on May 3 and May 5, respectively.

FII flows, oil price movement, rupee's trajectory and global cues will also influence market sentiment.

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

Asian share markets got off to a slow start on Monday as holidays in China and Japan crimped volumes and investors awaited a raft of data this week which should show the US leading a global economic recovery.

MSCI's broadest index of Asia-Pacific shares outside Japan was all but flat, South Korea's Kospi added 0.48% and Hong Kong's Hang Seng slipped 0.62%.

Meanwhile, back home, Nifty futures on the SGX traded 94 points lower at 14,548 around 7.30 am, indicating a gap-down start for the benchmark indices.

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

A total of 21 companies are slated to post their March quarter numbers today, including Kotak Mahindra Bank, SBI Life Insurance Company, Tata Chemicals, Godrej Properties, L&T Technology Services and Varun Beverages.

Shares of auto companies will be in focus as investors will react to the auto sales figures for the month of April.

Reliance Industries reported a consolidated net profit of Rs 13,227 crore for the quarter ended March 31, 2021, up 108 per cent from Rs 6,348 crore logged in the corresponding quarter last year.

IndusInd Bank on Friday reported a 193 per cent YoY jump in consolidated profit after tax at Rs 926 crore for the March quarter, aided by higher net interest income and lower provisions.

Yes Bank's standalone net loss widened marginally to Rs 3,788 crore in the March quarter of FY21 as against a net loss of Rs 3,668 crore a year ago. The lender posted a net profit of Rs 148 crore in the December quarter.