Market Ahead, May 4: Top factors that could guide markets this week

After rallying nearly 8 per cent last week, the Indian markets are staring at a massive gap-down open today marked by the SGX Nifty, which is down over 500 points. Investors will today react to some crucial developments over the extended weekend which included another US-China flare-up, the extension of lockdown, and some crucial corporate results.

US President Donald Trump threatened to consider raising tariffs on China to retaliate for the spread of the coronavirus. Following this, most of the equity indices the world over tanked anything between 2-3 per cent on Friday. Since the Indian bourses were closed on Friday, the Dalal Street will react to the development today.

Apart from this, investors will also react to the government's decision to extend the nationwide lockdown by two more weeks to May 17 even though restrictions have been eased in non-hot spot areas. However, the biggest and most economically-important cities including Delhi, Mumbai, and Bengaluru, all marked red zones, will stay under strict lockdown. And hence, analysts say, the relaxations may not make any material impact on the slowing economic growth. Meanwhile, the market's wait for stimulus measures from the government continues.

According to a Business Standard report, the Finance Ministry is internally projecting FY21 GDP to be around 2-3 per cent, down from the 6-6.5 per cent predicted in the 2019-20 Economic Survey.

Meanwhile, the total number of coronavirus cases in India has risen to 42,505, with 1,391 people dead, according to Worldometer tally. Globally, over 35 lakh people have been infected by coronavirus so far although a few countries like the US, Italy, and Spain have started thinking about re-opening as the virus spread seems to have slowed down.

Heavyweight companies Reliance Industries, Hindustan Unilever, and Tech Mahindra will be in focus in today's session. Reliance Industries announced its Q4 earnings after the market hours on Thursday and reported a 38.73 per cent year-on-year drop in its consolidated profit. The conglomerate also said it would raise Rs 53,125 crore through a rights issue.

Hindustan Unilever's Q4 profit dropped to Rs 1,519 crore from Rs 1,538 crore reported in the corresponding quarter last year.

This week, a total of 17 companies are scheduled to announce their quarterly earnings which includes HCL Technologies, Kansai Nerloac Paints, and YES Bank among others.

On the macro front, Markit Manufacturing data for April will be released today while the Services PMI data for April will be released on May 6

Investors will also react to auto firms' April sales figures which nosedived amid the lockdown. While Eicher Motors April auto sales plunged 98 per cent, Maruti Suzuki reported zero sales in domestic market. 

As for the global cues, Asian indices fell in thin early trade today, with China and Japan on holiday. Australia’s benchmark ASX 200 index fell 0.3 per cent while Hong Kong dropped over 3 per cent. South Korea's Kospi slipped over 1 per cent.

Oil prices also dipped. Brent crude futures were down 3.4 per cent at $25.54 a barrel at 7 AM.

Read by: Kanishka Gupta