Market Ahead, November 9: Top factors that could guide markets this week

With clarity emerging on the next US president, analysts expect the benchmark indices to continue the previous week's rally and log new lifetime highs this week

Photo: Bloomberg
Photo: Bloomberg

Benchmarks Sensex and Nifty logged healthy gains last week and rallied over 5 per cent to inch closer to their lifetime highs. The Sensex is now just 0.9 per cent away and Nifty 1.4 per cent from their record high levels, recorded in January, 2020.

And, with clarity emerging on the next US president, analysts expect the benchmark indices to continue the previous week's rally and log new lifetime highs this week. 

Analysts expect the US dollar to weaken, oil prices to moderate, and interest rates to remain low under president-elect Joe Biden's administration, providing a tailwind for domestic equities. Many are optimistic that Biden’s experience in handling international affairs under the Obama administration may help repair relations with China and boost global trade.

On the other hand, the markets could see some turbulence if President Donald Trump refuses to concede defeat.

The market trend this week will further depend on how participants react to Bihar election outcome, macro data, and September quarter results. The Bihar assembly polls ended on Saturday and the counting of votes will be held tomorrow. Several exit polls gave the RJD-led Opposition alliance in Bihar an edge over the ruling NDA, while at least three predicted a clear majority for the 'Mahagathbandhan'.

On the macro front, industrial production and inflation data are scheduled to be announced on Thursday.

Around 2,600 companies are set to declare their quarterly earnings in the last week of September quarter earnings season. Among these, investors will mainly track the results of big ticket names like Tata Steel, Mahindra & Mahindra, NMDC, Aurobindo Pharma, and Coal India, among others.

Apart from these, market participants will also follow the Covid-19 trend. Rupee's trajectory, foreign fund flow, and oil price movement. FIIs net bought Rs 13,399 crore worth of shares in the first week of November against Rs 14,537 crore of buying in October.

On the Covid front. India's caseload went past 85 lakh on Sunday, while 1.26 lakh people have died so far, according to Worldometer. Meanwhile, the national recovery rate has improved to 92.49 per cent, according to the Union Health Ministry data.

And, in the end, let's have a quick look at the trade setup for today.

Wall Street stock futures and Asian indices started strong on Monday. E-mini futures for the S&P 500 jumped 0.6 per cent on Monday.

In Asia, Korea's Kospi, Australia's ASX 200 and Japan's Nikkei were all up over 1.7 per cent in early deals.

At 7:30 AM, the SGX Nifty was trading around 12,450, up 176 points and indicating a gap-up opening for the Indian markets today.

Lakshmi Vilas Bank will be in focus today after the bank reported widening of its net loss to Rs 397 crore in the September quarter because of rise in bad loans and provisions. As for capital raise, the bank said significant progress with Clix group is being made.

And, the Rs 6,400 crore IPO by Hyderabad-based Gland Pharma is set to open today. The price band for the offer has been fixed at Rs 1,490-1,500 per share. While analysts at IIFL recommend that investors subscribe to the issue given the long-term growth potential, they highlight that relatively rich valuations leave limited scope for upside in the near-term. The issue will close on November 11.