Key developments that will drive the markets this week

Let us look at the key developments this week.

Aug 02, 2021 07:08 IST India Infoline News Service

Domestic markets during the week stayed volatile and remained well within their board range. On Friday, the markets remained volatile and settled almost unchanged amid mixed cues. Amongst the sectors, healthcare, auto, consumer goods ended with gains whereas metal and banking ended with losses.

On the earnings front, some of the prominent names like HDFC, Bharti Airtel, SBI, Dabur, M&M and Cipla will announce their numbers along with several others. Meanwhile, the global COVID trend will also be closely watched by the participants.

Let us look at the key developments this week.

Covid-19 updates

According to the Union Health Ministry data, India on Sunday reported slightly more than Saturday’s count by 41,831 new Covid-19 cases in the last 24 hours. Registering an increase for the fifth consecutive day, active Covid-19 cases in India have climbed to 4,10,952 and now comprises 1.30% of the total infections.

Union Health Secretary Rajesh Bhushan reviewed the Covid-19 situation in 10 states that has been witnessing an increasing trend in daily Covid cases. The Union Health Secretary urged these states to impose stricter restrictions in districts with a positivity rate above 10% to prevent/curtail the movement of people and formation of crowds in order to limit coronavirus infections.

Further, more than 49.49 crore (49,49,89,550) COVID19 vaccine doses have been provided to States/UTs so far. Also, 3,00,58,190 vaccine doses are still available with the States/UTs: Government of India

RBI policy in this week

RBI monetary policy review meeting scheduled during the week and the committee would announce the outcome on August 6. The majority expect status quo on key rates, however the commentary on inflation trajectory and growth will be in focus.

Q2FY22 Results Expectations

On the earnings front, we have a long list of companies who will be announcing their numbers during the week. Some of the prominent names are HDFC, Bharti Airtel, State Bank of India, Titan Company, Dabur, M&M, Cipla, GAIL India, Adani Ports, Hindalco Industries, ZEE and Divis Labs.

Punjab National Bank, Bank of Baroda, HPCL, Balaji Amines, Castrol India, Emami, RBL Bank, Varun Beverages, Adani Enterprises, Bank of India, Barbeque-Nation Hospitality, Godrej Properties, Inox Leisure, Indian Overseas Bank, Kalpataru Power Transmission, Tata Consumer Products, Adani Green Energy, Apollo Tyres, Adani Total Gas, Bosch, Godrej Consumer Products, Tata Communications, Adani Power, Escorts, Gujarat Gas, Indiabulls Housing Finance, Ipca Laboratories, REC, Tata Chemicals, Thermax, Alkem Laboratories, AU Small Finance Bank, Bharat Electronics, BEML, Berger Paints India, Indigo Paints, JK Tyre & Industries, NALCO, Sona BLW Precision Forgings, Tata Power, Ujjivan Small Finance Bank, Voltas, Amber Enterprises India and DCB Bank will also release quarterly earnings in this week.

4 IPOs to hit the market

The initial public offering (IPO) market with four companies lined up to launch their issue. These companies are Windlas Biotech, KRSNAA Diagnostic, Exxaro Tiles and Devyani International.

According to the NSE website, these four IPOs will be launched on the same day August 04 and will be available for subscription till August 06, 2021. Subsequently, these IPOs will have their anchor investors subscription on August 03, 2021.

Devyani, the largest franchisee of Pizza Hut, KFC, and Costa Coffee, will launch its IPO comprising of Rs440cr of fresh issue and offer for sale of 155,333,330 equity shares from promoter’s RJ Corp and Dunearn Investments. The price band is said to be fixed between Rs86-Rs90 per equity share.

Windlas Biotech IPO involves Rs165cr fresh issue and offers for sale of up to 5,142,067 equity shares by Vimla Windlass and Tano India Private Equity Fund II. The Price Band of the Offer has been fixed at Rs448 to Rs460 per Equity Share.

KRSNAA Diagnostics IPO comprised of Rs400cr fresh issue and offer for sale of up to 8,525,520 equity shares by PHI Capital Trust-PHI Capital Growth Fund-I and Kitara Piin, Somerset Indus Healthcare Fund I and Lotus Management Solutions.

Exxaro Tiles IPO will hold a fresh issue of 1,11,86,000 equity shares and an offer for sale of up to 22,38,000 equity shares by Dixitkumar Patel. The price band of IPO is between Rs118-120 per equity share.

Glenmark Life Sciences to debut on stock exchanges on Aug 6

Glenmark Life Sciences, the subsidiary of Glenmark Pharma, will debut on August 6, 2021. The company shares are currently trading at a premium of Rs130-150 in the grey market.

Glenmark Life Sciences sold shares in the price band of Rs695-720 per equity share. The company is a leading manufacturer of selected specialized active pharmaceutical ingredients (APIs) for chronic therapeutic areas such as the central nervous system, diabetes, pain management, among others.

FII & DII during last week

Market participants in India turned cautious and FII’s dumped equities worth over Rs6,900cr during last week. July witnessed the highest sell-off by FIIs since March 2020 as markets witness a rough path with valuations at all-time high and escalation in third wave concerns.

Foreign institutional investors (FII) remained net sellers for the fourth consecutive month in July, offloading Rs23,193.39cr.

On the contrary, domestic institutional investors continued to support the market as they net bought Rs8,206cr worth of shares last week, taking the total buying to Rs18,393.92cr in July, the highest monthly buying since March 2020.

Economic Data & Auto Sales in action

In this week macroeconomic data would be in focus as Markit Manufacturing PMI data will be released on August 2 and Markit Services & Composite PMI numbers for July are scheduled on August 4.

Also, Indian auto companies will be releasing its July auto sales figure. Maruti Suzuki, TVS Motor, Tata Motors, Eicher Motors, Bajaj Auto, Ashok Leyland, M&M and Escorts will be in focus.

Technical outlook

Markets witnessed a volatile week as the benchmark index saw pendulum swings on account of July expiry settlements. Index Option gamma writers took the centre stage as the indices traded in a narrow range for the major part of the week. On the options front (August 26, 2021 expiry), Nifty 16000CE strike price has witnessed fresh writing, hinting a formation of a ceiling level for the index around the mentioned strikes in the coming days.

Global data to look out in this week

Data on factory orders is slated for Tuesday and the weekly report on initial jobless claims is on Thursday with Friday's U.S. non-farm payrolls report will be in focus.

Also, several Fed officials to speak during the week, including Boston Fed President Eric Rosengren, Fed Vice Chair Richard Clarida and Fed Governor Christopher Waller.

The Bank of England is expected on this Thursday with officials are likely to raise their inflation forecast for this year, but the outlook for growth remains uncertain amid concerns over the delta variant.

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