Market Ahead, October 5: Top factors that could guide markets this week

Equity benchmark indices bounced back and gained more than 3 percent last week. The focus will now shift to the Supreme Court verdict on interest waiver case, September quarter earnings, US Presidential election and Covid-19 updates.

Investors will keenly follow bulletins on US President Donald Trump's health after he tested Covid positive last Thursday, sending US futures tumbling soon after. According to the latest reports, doctors treating Trump were pleased with his progress and he could return to the White House today. Following this, Nasdaq futures gained 0.58 per cent as investors prepare for the run-up to next month's US presidential election.

Asian markets followed US futures' lead with Australian S&P/ASX 200 up 2 per cent, Japan's Nikkei rising 1.3 per cent and South Korea's Kospi up 1 per cent. Market participants are also tracking the progress in the US government's Covid-19 stimulus package announcement and whether the US Congress can agree on the stimulus package size.

The SGX Nifty, which was trading over 100 points up, is indicating a gap-up start for the domestic indices today.

Today, all eyes will be on the Supreme Court's verdict on the interest waiver case, which will have a major impact on banking stocks, and thereby the headline indices. On Saturday, the government told the Supreme Court that it would waive interest on the repayment of loans of up to Rs 2 crore. While this may be a relief for MSME borrowers, it could spell additional burden for banks.

Besides, one of the largest retail broking houses, Angel Broking, will debut at the bourses today. The issue price is fixed at Rs 306 per share, the higher end of the price band. The IPO was oversubscribed nearly 4 times, the response being weak as compared to some of the other recent IPOs.

Auto stocks are expected to trade actively today after majority of them reported strong September sales numbers. Tata Motors sold 44,444 vehicles in September 2020 against 32,376 vehicles in the year-ago period. Hero MotoCorp's September sales also increased 16.9 per cent on a year-on-year basis.

Moreover, Vedanta Resources is set to initiate its bid to take Vedanta private this week. The reverse book building process to determine the exit price for delisting will commence today and close on October 9.

On the economic data front, Markit Services PMI for September will be released tomorrow. TSC will then begin the September quarter earnings season by announcing its quarterly numbers on October 7. 5paisa Capital is scheduled to announce its results the next day.

Apart from these, investors will continue to track the trend in investment by FIIs, the movement of rupee against the dollar, and the oil price trajectory.

And, on the Covid front, a single-day spike of 74,767 Covid-19 cases on Sunday pushed India's caseload to past the 66-lakh mark while more than 1 lakh people have died of the infection so far in the country.