Market Ahead Podcast, July 5: Top factors that could guide markets today

Macroeconomic data, upcoming Q1 earnings and global trends are likely to dictate market direction this week, say analysts. Any disappointment on the earnings front amid expensive valuations, they say, can weaken the overall positive sentiments.

The benchmark indices Sensex and Nifty shed 0.8 per cent each last week.

Going into trade, investors will continue to track cues from global markets in order to gain direction in movement. Rising vaccination and reducing Covid cases are likely to provide optimism in the market.

So far, India has recorded 3.05 crore cases and over 4 lakh fatalities. Meanwhile, the cumulative number of Covid-19 vaccine doses administered in India has crossed 34.46 crore, according to the Union Health Ministry.

Furthermore, large and mid-cap IT companies will remain in focus this week as Q1 FY22 result season commences in India, with Tata Consultancy Services slated to post its results on July 8.

Avenue Supermarts, Delta Corp, Shyam Metalics and Energy and PTC Industries are among other companies slated to post their quarterly numbers this week.

On the macro front, investors will track the Services and Composite PMI data that is slated to be out today. According to the monthly IHS Markit India Services Purchasing Managers’ Index (PMI), the services PMI stood at 46.4 in May, signalling contraction. Meanwhile, Nikkei India Composite PMI Output Index fell to 48.1 in May from 55.4 in April, suggesting a slowdown in private sector output growth.

Action in the primary market will return after a week's hiatus as two initial public offers (IPOs) will open this week. Clean Science and Technology and GR Infraprojects' IPOs will run between July 7-9 and cumulatively look to raise a little over Rs 2,500 crore. 

That said, shares of recently concluded India Pesticides IPO will commence trading on the exchanges today. The issue price has been fixed at Rs 296 per share and according to analysts, the scrip can list at a premium of over 15 per cent.

Lastly, oil price movement, rupee's trajectory and FII flows can also influence market mood.

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

Asian stocks were steady after US shares extended a rally on speculation the Federal Reserve has scope to continue providing substantial stimulus support. Japan’s Topix index fell 0.3%, Australia’s S&P/ASX 200 Index added 0.2%, South Korea’s Kospi and China’s Shanghai Composite Index rose 0.4% each.

Meanwhile, SGX Nifty hinted at a near gap-up start for the benchmark indices today as it was trading 97 points higher at 15,844 around 7.40 am.

Now, a look at the stock-specific triggers that are likely to guide the market today.

Avenue Supermarts said its standalone revenue from operations rose 31.27 per cent YoY to Rs 5,031.75 crore for the quarter ended June 30.

IndoStar Capital Finance has acquired a 25 crore share in its home finance subsidiary for Rs 250 crore, the company said on Friday.

HCL Technologies has announced a multi-year agreement with Fiskars Group to help them with digital transformation.

HDFC said it earned Rs 263 crore as profit on sale of investments during the first quarter of the current financial year.

Vodafone Idea can raise funds through equity sale or promoters can infuse capital which can be used for clearing dues, non-profit entity Telecom Watchdog said in a letter to telecom minister while demanding rejection of the debt-ridden company's request seeking more time to pay dues of Rs 8,292 crore.