TRIGGERS WEEKLY (JUN 08–JUN 12)

weekly cap 1 TRIGGERS WEEKLY (JUN 08–JUN 12)

Trigger for the Week

How will it impact?

  • The 12% Nifty rally could keep a lid on the market levels
  • While Nifty closed above 10,100, markets are likely to take a breather after a sustained 2-week rally
  • COVID-19 cases appear to gather momentum across India
  • India is now fifth in the list of countries with COVID-19 afflictions and things could get worse with Unlock 1.0
  • Most key businesses to open up from June 08 onwards
  • This could work both ways. While markets will welcome this move, any spike in COVID cases will be negative
  • MPC minutes have painted a grim picture of GDP growth in FY21
  • MPC minutes could have a positive outcome in that the grim GDP forecasts could keep interest rates low
  • Over 100 companies are expected to declare earnings this week
  • Major earnings announcements are expected from Hero, Titan, Eicher, Hindalco, M&M, BHEL, PVR, India Hotels
  • Outcome of FOMC meeting on 10 June will be key for liquidity
  • While US rates are already at zero, markets expect heavier bond buying which should help market liquidity
  • FIIs pour in record Rs.13,900 crore into equities in June
  • The infusion in first week of June was more than any of the previous months in 2020. It could signal a turn.
  • The 40th meeting of the GST Council is scheduled on Friday 12 June
  • There could be some GST hikes, especially in non-core products and ITC may have a challenge on hand
  • Option writing has shifted to a higher range on the Nifty
  • The put writing is concentrated on 9,000 strike and call writing in 10,300 strikes. Low VIX should be a positive
  • Timely arrival of monsoon and tapering of Cyclone Nisarga positive
  • While the Cyclone was a damp squib, IMD expects normal monsoons at 102% of LPA this year
  • PMI manufacturing and services still too low but gives momentum hope
  • Markets will take heart from the fact that May PMI has shown positive momentum over April
  • CPI inflation data is expected to be announced this week
  • Inflation is critical as no inflation announcement was made for April and keeping inflation in check is essential
  • The IIP number will also be watched this week for full COVID impact
  • MOSPI will announce the April IIP which is expected to be deeply in negative due to total lockdown
  • Markets to keep an eye on global cues during the week
  • Key data points include jobless claims in the US, EU GDP estimates, EU IIP, Japan GDP and China vehicle sales
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