US debt crisis and DLF, Bharti results to impact mkt this week

The movement of Indian stocks this week will hugely depend on the reaction of global markets to the way the US handles its Tuesday's deadline to raise $14.3 trillion debt limit and a word on its possible downgrade by credit rating agencies, experts said.

Back home, quarterly results from Bharti Airtel, Ranbaxy and DLF will dictate the market direction, which has been on down-trend since last Tuesday after the Reserve Bank hiked its key interest rates to tame inflation.

Besides, the Monsoon session of the Indian Parliament will commence from Monday amid a string of controversies facing the government including corruption and black money.

However, marketmen said that a lot will depend on the outcome of the August 2 deadline in the US to raise its debt limit, adding that a failure to reach an agreement to resolve the crisis will have a cascading effect on the world markets.

US President Barack Obama has appealed to Republicans as well as Democrats to find a "common ground" in the US Senate to reach a compromise on raising the debt ceiling.

A bill to avert a disastrous US debt default needs to be cleared by the Senate, failing which the world's biggest economy could face its first default on international obligations, leading to its credit downgrade.

"Outcome of the US debt ceiling will set the trend in the markets globally be it the currency market, commodity or gold, silver among others. This will be the most important event this week and the street is closely monitoring it," Ashika Stock Brokers' Research Head Paras Bothra said.

The 30-share Bombay Stock Exchange index, Sensex, lost over 500 points to close at 18,197.20 last week, after the RBI took everybody by surprise with a 50 basis point hike in repo (lending) and reverse repo (borrowing) rates.

Overall, in July, Sensex fell about 3%.

"A lot hinges on the monsoon session of parliament, which begins this week. A few very important bills are slated to be presented in parliament. Hopefully, the warring political class will set aside their differences and clear at least some of them," IIFL Head of Research Amar Ambani said.

Besides, monthly data of auto and cement companies for July will be released this week and impact investor sentiment.

Meanwhile, important Sensex companies will announce their quarterly earnings, which will have crucial impact on the market trend. Bharti Airtel will announce its first quarter numbers on August 3, Ranbaxy will declare its Q2 results on August 5 and DLF will announce its Q1 results on August 2.