Market Ahead, September 28: Top factors that could guide markets this week

The Indian benchmark indices settled nearly 4 per cent lower last week amid heightened volatility after coronavirus cases spiked again, especially in Europe. Back home, India's caseload surpassed the 60-lakh mark while the death toll reached 95,574, according to Worldometer. In this holiday-shortened week, investors will focus on the RBI policy meet, macro data, auto sales figures for September, as well as Covid-19 trends and global cues for market direction. 

The equity markets will remain closed on Friday, on account of Gandhi Jayanti.

The RBI's monetary policy committee will meet for three days from September 29 and the resolution will be announced on October 1. According to experts, the RBI is likely to keep interest rates unchanged in view of the rising retail inflation driven mainly by supply side issues.

On the macro front, the PMI data for the manufacturing sector is scheduled to come on Thursday. Auto sales for September month will be released starting October 1. In its latest report on the auto sector, India Ratings said that sales are likely to remain sluggish in September, especially on the retail side.

Apart from this, foreign portfolio investors have sold shares worth over Rs 4,000 crore in September so far and the continuation of this trend will further pressure the equity market.

Globally, investors will track the GDP data of the US and the UK while newsflow on the US stimulus measures will also be keenly followed.

In the primary market, The buzz is set to continue even this week, with 3 new IPOs and two listings. Initial public offerings by UTI Asset Management Company, Mazagon Dock Shipbuilders and Likhita Infrastructure will hit the capital market on September 29. On the other hand, shares of Chemcon Speciality Chemicals and Computer Age Management will list on bourses on October 1.

And now a quick look at the trade setup for today.

The Indian markets are likely to open high today as indicated by the SGX Nifty which was up 50-odd points at 7:30 AM. This comes amid gain in Asian shares early Monday. Japan's Nikkei gained 0.7 per cent, Hong Kong's Hang Seng was up 0.33 per cent, and Korea's Kospi surged 1 per cent. 

Bank stocks will remain in focus today as the Supreme Court is set to resume hearing in the loan moratorium and interest waiver case. 

Besides, Lakshmi Vilas Bank is also set to trade actively today after a large section of the bank's shareholders voted against the reappointment of the managing director and chief executive, as well as seven directors and auditors, at the recent AGM. In a latest development, the RBI has approved a Committee of Directors, composed of three independent directors, who would run the day-to-day affairs of the lender.