Market Ahead Podcast, Nov 1: Factors that could guide markets this week

Equities’ trading may remain thin this week as investors eye a holiday-truncated week. Besides, the last leg of earnings, largely packed with mid and smallcap names, could also keep markets subdued at benchmark level.

Last week, benchmark Sensex fell 2.4 per cent while the Nifty50 slipped 1.9 per cent. In the broader markets, the mid- and small-cap indices dropped 1 per cent each as foreign institutional investors sold their shares amid valuation concerns.

Three global brokerages -- Morgan Stanley, Nomura, and UBS – have downgraded Indian markets citing rich valuations while Chris Wood of Jefferies has said the sharp rally has brought his “overweight” stance on India under threat.

Given this, markets may try to stabilize this week and prepare for Muhurat Trading on the occasion of Diwali.

A special, one-hour Muhurat Trading session will be organized on Thursday, November 4 while markets will remain shut on Friday, November 5 on the occasion of Diwali Balipratipada.

Meanwhile, during the early part of the week, corporate earnings, IPOs, and economic data will keep investors busy.

The last leg of September quarter results will see companies like Bharti Airtel, SBI, HDFC, IRCTC, Tata Motors and HPCL announcing their September quarter results this week. 

Separately, on the economic front, investors will track Manufacturing PMI for October and IIP data for September due to be released later today. Additionally, auto firms will also begin announcing their monthly sales figures for October today onwards.

The Services PMI for October, on the other hand, will be declared on Wednesday, Nov 3.

In the primary market, initial share sale of Policybazaar.com will open today while Nykaa’s IPO will enter last day and Fino Payment Bank’s offer will enter its second day.

Globally, investors will track the US Federal Reserve’s 2-day monetary policy meeting, slated on November 2 nd and 3 rd , for cues on when the central bank plans to hike rates.

News flow around Covid-19, oil and energy prices, rupee and dollar movement, and bond yields will be some of the other factors driving the markets.