This week is a holiday-shortened one and volatility is expected to remain high. Macroeconomic data, i.e. core sector and auto sales numbers, will remain in focus. Besides, updates related to Covid situation in India and cues from global markets will also be closely tracked by market participants.
“The recent surge in the Covid cases combined with feeble global cues has turned the participants cautious. Besides, the divergence between Nifty and the banking index amid excessive volatility across the board is keeping traders guessing over the next directional move,” said Ajit Mishra, VP Research, Religare Broking.
Here are key factors that may guide the market this week:
India’s total active cases have reached 4,52,647. The country saw 62,258 new cases being registered in the last 24 hours, the highest single day rise so far this year, according to the health ministry. Maharashtra, Punjab, Chhattisgarh, Karnataka, Gujarat and Madhya Pradesh continue to report a high surge in daily cases and account for 79.57 per cent of new infections.
The yield on benchmark 10-year US Treasury notes rose to 1.66 per cent, lower than last week’s spike to 1.75 per cent that sparked a selloff on inflation fears and a potential Fed rate hike – something the Fed has pledged not to do. If the rise is sustained as feared by a quarter of analysts, this could lead to more sell-off.
Three-day trading week
For the week, trading will resume on Tuesday and conclude on Thursday. The financial and money markets will remain closed on Monday for Holi festival, and also on Friday on account of Good Friday — both extended weekends. This means, traders will have less time to price in movement in global markets.
Traders will also start pricing in earnings that are likely to begin from next week. The March quarter earnings season is expected to be strong with sectors such as information technology, metals, textiles, real estate and capital goods likely to report strong numbers. Further, the low base of the year ago quarter will optically make the current quarter earnings appear stronger.
Auto sales data
Auto companies will release their March sales data in the coming week, which will be keenly eyed by investors. There could be individual stock movement due to those numbers.
Traders will also keep an eye on some macro data that the government and RBI will release. February infra output, Q4 current account, Q4 external debt, preliminary import and export data for March and forex reserves as of March 26 are some of the data that will be released.
Nazara Technologies will be listed on Tuesday. The much awaited issue is still commanding a good grey market premium, despite other newbies having listed at a discount in recent days.