Market Ahead Podcast, June 21: Factors that could guide markets this week

After a volatile last week, investors can expect much the same going into the trade this week due to scheduled derivatives expiry of June month contracts. Meanwhile, with no major domestic macroeconomic data lined up this week, investors will closely eye global markets for cues. Besides, the progress of monsoon, Covid-related updates and RIL AGM will also be in focus.

Analysts suggest that traders should be cautious and adopt a stock-specific approach as markets get volatile. On the other hand, long term investors can take advantage of this volatility and adopt a 'buy-on-dips' strategy.

As Covid cases continue to recede and states re-open, doctors opined to not let the guard down and warned the third wave of the pandemic could be upon the country in the next 6-8 weeks. India's fresh Covid cases have stayed below 1 lakh for the last 14 days while on Sunday, the country reported 58,419 fresh cases, the lowest in 81 days. Going forward, the pace of infections and vaccination will sway the market trajectory.

Meanwhile, on the earnings front, over 100 companies are slated to post their March quarter numbers this week, including ONGC, Oil India, NMDC, Ashok Leyland, Info Edge, Sobha and Apollo Hospitals. With the Q4 earnings season coming to a close, the focus will soon turn to next quarter earnings.

That said, one of the biggest event for markets of the year -- Reliance Industries' AGM -- is slated for Thursday and will be closely tracked by investors. The AGM could provide details on a possible Budget phone launch by Jio in association with Google, progress on 5G technology and update on a deal with Aramco. Most analysts have maintained bullish bets on RIL ahead of AGM.

The action in the primary market will continue as IPO by India Pesticides will open for subscription on Wednesday. The Rs 800 crore IPO is priced in the band of Rs 290-296 per equity share. Furthermore, two IPOs that closed for subscription last Wednesday are slated to make their debut on the bourses this week. Sona BLW Precision Forgings (Sona Comstar) and Shyam Metalics & Energy are expected to list on exchanges on June 24.

Lastly, the rupee's trajectory, FPI flow and oil prices can further sway market sentiments.

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

As the global market mood soured, investors back home also braced for a sharp correction today. SGX Nifty was ruling 190 points lower at 15,559 around 7.35 am, indicating a gap-down start for the benchmark indices.

Globally, stocks dropped as investors mulled the implications of a surprise hawkish shift last week by the U.S. Federal Reserve. Japan’s Topix index shed 2.5%, Australia’s S&P/ASX 200 Index dropped 1.8%, South Korea’s Kospi index fell 0.9% and Hong Kong’s Hang Seng Index declined 1.2%. S&P 500 and Nasdaq futures traded 0.3% and 0.1% lower, respectively.

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

Oil India, Info Edge, Bharat Dynamics, TCNS Clothing, and VST Tillers Tractors are among 70 companies slated to post their quarterly numbers today.

Saudi Aramco chairman and Governor of the Kingdom's wealth fund Public Investment Fund, Yasir Al-Rumayyan, may be inducted on the board of Reliance Industries a precursor to a USD 15 billion deal, reports said.

In a rare regulatory move, Sebi has restrained PNB Housing Finance from going ahead with shareholders' voting on the proposed Rs 4,000 crore-deal with Carlyle group and directed the company to carry out the valuation process as per the relevant legal provisions.

NTPC posted nearly three-fold jump in consolidated net profit to Rs 4,649.49 crore for March quarter 2020-21 on the back of higher revenues. The consolidated net profit of the company in the year-ago period was Rs 1,629.86 crore.

UCO Bank said its board will meet next week to consider raising up to Rs 500 crore as tier-II capital.