Key developments that will drive the markets this week

Let us look at all important news that could impact market sentiment in the week ahead.

Apr 12, 2021 07:04 IST India Infoline News Service

Key indices snapped a 3-day rise on Friday, to end in red amid rising cases of Covid and fears of complete lockdown in the country. Sensex ended 154.89 points or 0.31% lower at 49,59 and Nifty slipped 38.95 points or 0.26% to 14,834 Let us look at the events that may drive the market in the week ahead.


Q4 earnings set to begin

The earnings for the fourth and last quarter of financial year 2020 will begin today with Tata Consultancy Services (TCS) flagging off the season. Apart from TCS, Infosys, Wipro, Mindtree, HDFC Bank, ICICI Lombard General Insurance Company are among 21 companies that will announce quarterly earnings next week. Consensus estimates expect the season to reflect flattish growth. However, focus will be on the management commentary, as the country slows moves into lockdown mode to mitigate the spread of Covid that has been rapidly on the rise. The supply-demand dynamics, potential for disruptions in supply chain management and movement of cargo, and commentary on growth over the next few quarters will be key things to watch out for in the earnings reports this season.
 
Software exporters

TCS, Infosys, Wipro and are set to come out with their results on April 12th, 14th and 15th respectively. Covid related disruption had accelerated adoption of cloud technologies and digitization, benefitted the sector immensely. The jump in demand post Covid, higher-end deal wins, new growth avenues, dollar revenue growth will be some of the key components of the post results commentary that investors will watch out for.
 
Covid19 surges

India on Sunday reported 1,52,879 new Covid-19 cases and 839 deaths in the last 24 hours, according to data from the Union Health Ministry. The total number of cases in the country now stand at 1,33,58,805 and the death toll has risen to 1,69,275. Maharashtra on Sunday recorded 63,294 new coronavirus cases, its highest single-day rise since the pandemic began, pushing the caseload to 34,07,245, the state health department said. The state has hinted at the weekend lockdown being extended for a longer period in case cases don’t plateau soon.
 
As Covid19 cases continue to surge, Centre on Sunday banned the export of anti-viral drug remdesivir in view of increased demand. In addition, to ensure easy access of the drug, which is used in treatment of coronavirus, all domestic manufacturers of remdesivir have been requested to display details of their stockists and distributors on their website, the Union Health Ministry said.
 
Macroeconomic data

This week will see a lot of important economic data releases. Industrial production (IIP) for February and Consumer Price Index (CPI) inflation for March will be released on today, while WPI inflation for March will be announced on Wednesday. After a year of staying high, CPI inflation has moderated in the past couple of months even as WPI inflation has moved up. Price pressures could escalate again, given supply disruptions caused by new lockdown rules. Later, Balance of trade data for March and foreign exchange reserves for the week ended April 9 will be released on Thursday and Friday respectively.

Industrial production in January had contracted 1.6%, hit by capital goods, manufacturing, and mining sectors, while CPI inflation in February jumped to 5.03% against 4.06% in January, on the back of climbing food prices.
 
US Stocks

U.S. stocks ended higher on Friday even though U.S. The Dow rose 297.03 points, or 0.9%, to close at a record 33,800.60. The S&P 500 index rose 31.63 points, or 0.8%, to end at a record 4,128.80. The Nasdaq Composite Index rose 70.88 points, or 0.5%, ending at 13,900.19.
Treasury yields rose after a U.S. economic report revealed inflation may be hotter than expected as the economy rebounds from the pandemic. The U.S. producer-price index rose 1% in March, the U.S. Labor Department said Friday.  Economists polled by The Wall Street Journal had forecast a 0.5% rise. The rate of wholesale inflation over the past 12 months climbed to 4.2% in March. That’s the highest level since September 2011. Fed Vice Chairman Richard Clarida, in a Friday interview, said that any rise in inflation will be transitory, noting that the Fed’s forecast is that inflation will move above 2% for a time this year and for inflation to return later this year to around 2%.

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