Key developments that will drive the markets this week

Let us look at the key developments this week.

Jun 07, 2021 07:06 IST India Infoline News Service

On Friday, Sensex and Nifty dropped in a session of profit-taking, led by banking stocks. Sensex closed 132 points lower at 52,100 and Nifty slipped 20.10 points to 15,670.

Let us look at the key developments this week.

Worst is over for Covid19 in India

New Covid-19 infections reported in the country have dipped to the lowest since April 6, according to data released by the Union health ministry. As many as 1,14,460 people tested positive for the virus in the last 24 hours, taking the cumulative caseload to 2,88,09,339. The daily positivity rate has come down to 5.42%, while the weekly positivity rate currently stands at 6.54%. Out of these, over 14 lakhs are active cases while over 2.69 crore people have recovered after testing positive. With 2,677 new deaths, the toll now stands at 3,46,759. Tamil Nadu remains the topmost contributor with 21,410 new cases.

Meanwhile, over 1.63 crore COVID-19 vaccine doses are still available with the states and UTs to be administered, the Union Health Ministry said on Sunday. The country has so far administered 23,13,22,417 anti-Covid jabs. As many as 33,53,539 doses out of the total were given in the last 24 hours. India crossed the 23-crore milestone in vaccinations on Saturday, said the health ministry.

As Covid-19 cases continue to see a drop, several states have chosen to implement a phased unlocking process, while others have extended it for another week. Tamil Nadu, Himachal Pradesh and Goa governments on Saturday extended the Covid restrictions in their respective states till June 14. However, Tamil Nadu Chief Minister M K Stalin said though lockdown will be in place, some of the curbs will be eased from Monday, except in 11 districts where the number of new cases reported was still high. Both Tamil Nadu and Himachal Pradesh government also announced the cancellation of Class 12 state board examinations.

Maharashtra government announced that it will lift lockdown restrictions from Monday through its five-level unlock plan. The lockdown in Maharashtra will be relaxed on the basis of Covid positivity rate and availability of oxygen beds in the state. The order will be implemented from Monday.

Q4 earnings
The earnings season continues with several well-known names set to release their results this week. GAIL India, Union Bank of India, Central Bank of India, MRF, Engineers India, Petronet LNG, Prestige Estates Projects, Bata India, Century Plyboards, Cera Sanitaryware, SAIL, BEML, BHEL, DLF, Sun TV Network, CARE Ratings, JK Cement, Sobha are among the 250 companies set to come out with their results this week.

FIIs

Foreign investors have infused close to Rs8,000cr into Indian equities in the first four trading sessions of June amid improved sentiment as Covid cases continue to decline in the country. The inflow comes following a net withdrawal of Rs2,954cr in May and Rs9,659cr in April, data with depositories showed.

According to the data, foreign portfolio investors (FPIs) put in a net sum of Rs7,968cr in the Indian equity market during June 1-4. Prior to April's outflow, FPIs had been infusing money in equities since October. They invested over Rs1.97 lakh cr in equities during October 2020 to March 2021. This included a net investment of Rs55,741cr in the first three months of this year. Apart from equities, FPIs have poured just Rs22cr in the debt markets during the period under review

Economic data releases
India’s industrial production and manufacturing data for the month of April will be released on Friday. Foreign exchange reserves data for the week ended June 4 will also be released on Friday.

US Stocks
U.S. stocks ended higher on Friday after the May nonfarm-payrolls report showed a less-than-expected gain, leading investors to bet that the Federal Reserve will maintain its easy-money policies for longer. The Dow Jones Industrial Average rose 179.35 points, or 0.5%, at 34,756.39. The S&P 500 index advanced 37.04 points to 4,229.89, a gain of 0.9% while the Nasdaq Composite Index rose 200 points, or 1.5%, to 13,814.49.

May’s employment report from the U.S. Labor Department showed that the U.S. created 559,000 jobs, falling short of the consensus estimate for a gain of 671,000, based on a poll of economists by Dow Jones and The Wall Street Journal. The unemployment rate fell to 5.8% from 6.1%, compared with estimates of a dip to 5.9%.

The government data come after April data showed that just 266,000 new jobs were created on a seasonally adjusted basis, significantly missing economists’ forecast that had come in on average at around 1 mn.

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