Key developments that will drive the markets this week

Let us look at the key developments this week.

Jul 12, 2021 07:07 IST India Infoline News Service

Domestic bourses remained range bound for yet another week and ended almost unchanged amid mixed cues. Indian stock market was upbeat in the beginning tracking favourable global markets, however, profit-taking in the global markets in the following sessions capped the upside with the rise in US bond yields and an uptick in COVID cases of a new variant.

Consequently, the BSE Sensex and the Nifty settled at 52,386 and 15,689 levels, respectively. The Nifty for the week corrected marginally by 0.2%, while investors’ wealth inched up by ~Rs1 trillion mainly aided by rebounded in midcap and smallcap stocks.

Let us look at the key developments this week.

Coronavirus vaccine & cases in India

According to data from the Union Health Ministry, India, on Sunday reported 41,506 daily new Covid-19 cases in the last 24 hours, pushing the country's total tally to 30,837,222. The daily count of cases has been staying above 40,000 for the last 5-days.

An official said on Sunday, with the addition of 429 new cases of coronavirus, the infection count in Maharashtra's Thane district has gone up to 5,37,358. The Covid-19 mortality rate in Thane stood at 2.01%.

More than 38.60 cr (38,60,51,110) vaccine doses provided to states/UTs so far and a further 11,25,140 doses are in the pipeline. Further, the Health Ministry said more than 1 crore 44 lakh unutilised Covid vaccine doses are still available with the states and UTs and private hospitals to be administered. The ministry said the government is committed to accelerating the pace and expanding the scope of Covid-19 vaccination throughout the country.

Upcoming Q1FY22 earnings

The coming week will witness results to kick off the FY22 earnings season as nearly 75 companies which include Wipro, Mindtree, HDFC Asset Management Company and Larsen & Toubro Infotech will announce their results.

Followed by L&T Technology Services, Dodla Dairy, L&T Finance Holdings, HFCL, HMT, Steel Strips Wheels, Welcure Drugs & Pharmaceuticals, Deccan Health Care, Tata Metaliks, 5paisa Capital, Craftsman Automation, Essar Securities, Hatsun Agro Product, Dr Lalchandani Labs, Mishtann Foods, Tasty Dairy Specialities, Tinplate Company of India, Vikas EcoTech, Angel Broking, Aditya Birla Money, Cyient, Mangalam Timber Products, Onward Technologies, Rollatainers, Tata Elxsi, Tata Steel Long Products, Den Networks, GNA Axles, and Surana Solar will going to announce its Q1 numbers this week.

Macro-economic data in the coming week

Industrial production (IIP) and manufacturing production data for May, along with CPI inflation for June will be released on Monday., Whereas, WPI inflation will be announced on Wednesday.

Balance of trade for the month of June will be released on Thursday, while deposit & bank loan growth for the week ended July 2 and foreign exchange reserves for the week ended July 9 will be released on Friday.

Ahead of Zomato IPO

Online food delivery and restaurant discovery platform Zomato is set to open for the subscription on July 14 and it will close on July 16. The stock is likely to list on the exchanges on July 27.

Technical Outlook

Markets witnessed a lacklustre week with the major indices traded trading in a narrow band throughout the major part of the week.  Nifty Index Option gamma writers took the centre stage as the benchmark index closed the week on a flat note. On the weekly charts, both the indices have formed a bearish dark cloud cover candlestick pattern, indicating a possibility of a marginal reversal.

On the options front (July 29, 2021 expiry), the Nifty 16000CE strike price has witnessed fresh writing, hinting at a formation of a ceiling level for the index around the mentioned strikes in the coming days.

FII & DII updates

FIIs net sold more than Rs2,000cr worth of shares in the week gone by, taking the total outflow to Rs4,256.45cr in the month of July so far. However, DIIs net bought Rs1,903.45cr of shares in July.

India's forex reserves hit a record high of $610.012 bn

India's forex reserves hit another high this week as it rose to a lifetime high of $610.01 billion as of July 2, as compared with $609 billion a week earlier, the Reserve Bank of India (RBI) said on Friday. In the previous week ended June 25, 2021, the reserves had jumped by $5.066 billion to reach $608.999 billion.

U.S. stocks recover to end at record highs on Friday

U.S. stock markets hit a third straight week of gains to end at all-time highs on Friday amid recovery from the previous session that was marked by doubts about global economic growth in the pandemic.

The Dow and S&P 500 booked weekly gains of about 0.2% and 0.4%, respectively. The Nasdaq also finished the week with a 0.4% gain.

While Oil futures ended sharply higher with the U.S. benchmark advancing 2.2% to settle at $74.56 a barrel. Gold settled 0.6% higher at $1,810.60 an ounce.

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