Market Ahead Podcast, August 9: Factors that could guide markets this week

Macroeconomic data, ongoing quarterly earnings season and global trends will dictate market direction this week, say analysts. Further, the pace of FII flow, oil price trajectory, and action in the primary markets will also be keenly tracked by market participants.

The domestic markets, in a spectacular bull rally last week, surged past the 16,000 marks for the first time. Analysts believe some caution can be exercised with markets at record highs. They urged investors to seek out fundamentally resilient stocks and resist the urge to invest in fancy fast-moving names.

Now, this week, the specifics on important economic indicators like Industrial Production for June and CPI inflation for July will keep markets on their feet. Both the numbers are slated to be out on August 12. The CPI inflation will be a key data to watch out for especially after the RBI increased its FY22 inflation forecast to 5.7 per cent from 5.1 per cent earlier.

Markets will also enter in the last leg of earnings season, with some 1900 companies slated to post their numbers. Prominent names include Tata Steel, ONGC, Coal India, Shree Cement, Lupin, Power Grid Corporation of India, Bharat Petroleum Corporation, Eicher Motors, Hero MotoCorp, Zomato and Grasim Industries.

Add to this, there will be no dearth of options in the primary market as well. After the closure of four issues last week, four more will hit the Street this week to garner Rs 14,628 crore.

Nuvoco Vistas Corporation, part of the Nirma Group, and online auto classified platform CarTrade Tech will launch their initial share-sales on Monday, August 9 while that of Aptus Value Housing Finance and Chemplast Sanmar will be open for public subscription on Tuesday, August 10.

Nuvoco Viastas' Rs 5,000 crore IPO is priced in the band of Rs 560-570 a share. Meanwhile, CarTrade looks to raise Rs 2,998.51 crore at the upper end of the price band of Rs 1,585-1,618 a share. The offer by CarTrade is entirely an offer for sale. Aptus Value Housing plans to raise Rs 2,780 crore and has priced the offer in Rs 346-353 a share. And Rs-3,850-crore IPO of Chemplast Sanmar will offer shares at Rs 530-541 a share.

That said, shares of Rolex Rings will make a debut on the bourses on August 9. The final price has been fixed at Rs 900 per share. Grey market trends suggest a strong listing for the company at Rs 1,350, translating into nearly 50 per cent listing pop.

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

Asian shares wobbled on Monday amid concerns on rising Covid cases. Meanwhile, holidays in Tokyo and Singapore made for thin trading conditions, leaving MSCI's broadest index of Asia-Pacific shares outside Japan down 0.1 per cent. Nasdaq futures slipped 0.5 per cent and S&P 500 futures 0.3 per cent.

Amid this backdrop, benchmark indices back home also eyed a tepid start to the week, with SGX Nifty down 38 points at 16,230 around 7.40 am.

On the stock-specific front, shares of Shree Cement, AstraZeneca Pharma India, Balrampur Chini Mills, Chemcon Speciality Chemicals, Clean Science and Technology, Gati, Indian Hotels, Laxmi Organic Industries, MRF, and Venky's (India) will be in focus as they are among over 100 companies slated to post their earnings today.

Shares of telecom companies will also be in focus after a Business Standard report suggested the DoT is likely to consult an external agency for the revival package that is expected to provide relief to the sector besides being a lifeline for Vodafone Idea.

Bank of Baroda reported a standalone profit after tax of Rs 1,209 crore in the quarter ended in June 2021 on higher growth in net interest income (NII) and lower provisioning for bad loans. The lender had reported a net loss of Rs 864 crore on a standalone basis in the corresponding quarter of the previous fiscal.

Jindal Steel and Power's Board accepted the revised binding offer from Worldone Private Limited (acquirer) to divest its 96.42 per cent stake in Jindal Power Limited (JPL), a material subsidiary of JSPL, the company informed.

State-owned Steel Authority of India reported a consolidated net profit of Rs 3,897 crore for the first quarter of 2021-22, as against a loss of Rs 1,226 crore a year ago. The company had reported a net profit of Rs 3,470 crore for the previous quarter.

Tata Power's consolidated net profit jumps nearly 74 per cent to Rs 465.69 crore in the June 2021 quarter. The company's consolidated net profit had stood at Rs 268.10 crore in the corresponding quarter of the last financial year.