Market Ahead, Aug 24: Top factors that could guide markets this week

Benchmarks Sensex and Nifty advanced over one and half per cent each last week, largely backed by positive global cues. Meanwhile, the broader market outperformed with the Nifty Midcap index rising over 3 per cent while the SmallCap shot up 5 per cent. As such, investors will keep a keen eye on the broader market this week too.

The overall direction for the Indian equity market will be largely driven by developments around Covid-19 and overall global sentiment with key focus on the US-China relations. The scheduled F&O expiry of August month contracts are expected to keep the volatility high as traders roll over their positions to the next series.

On the Covid-19 front, India's tally zoomed past the 31-lakh mark, while the death toll climbed to 57,692, according to Worldometer. The government yesterday announced the release of standard operating procedures for resuming shooting of films and TV programmes. In the US, the American health regulator yesterday announced an emergency approval of blood plasma from recovered coronavirus patients as a treatment against the disease.

Besides, an ongoing Supreme Court hearing on telecom AGR dues remains on market participants’ radar with the next hearing scheduled for today. Foreign fund flow will be another key trigger for the markets as overseas investors have put in Rs 41,330 crore in Indian markets on net basis in August so far, contributing heavily to the bulls.

Moreover, the last leg of June quarter earnings will trigger stock-specific movements. Over 300 companies are scheduled to announce their June quarter earnings this week, with LIC Housing Finance, NMDC, and Avanti Feeds being among the major ones.

Among other key events for the week is the meeting of the GST Council to be held on August 27. Meanwhile, the Rs 250-crore rights issue of Minda Industries will open on August 25 and the Rs 120 crore rights issue of Satin Creditcare Network will close on August 26.

Let's now focus on today's trade setup.

The SGX Nifty is indicating a positive startup for the Indian markets today. At 7:30 AM, the SGX Nifty was up 33 points at around 11,410 levels, tracking a similar trend in Asian indices. Australian shares were up 0.17 per cent while Japan’s Nikkei reversed early losses to be last up 0.34 per cent. South Korea’s KOSPI gained 0.9 per cent in early deals.

On the stock-specific front, Gautam Adani-led Adani Group is set to acquire a 74 per cent stake in Mumbai International Airport with the current operator settling its disputes with its minority partner and exiting the venture. Sources have told Business Standard that the transaction under which Adani Group will acquire 50.5 per cent of GVK Group could be announced before next week.

Private-sector general insurers ICICI Lombard and Bharti AXA general insurance have signed definitive agreements to combine their business. Bharti AXA's business will be demerged into ICICI Lombard's through a scheme of arrangement under which the shareholders of Bharti AXA would receive two shares of Lombard for every 115 shares held by them. The financial details of the deal have not been revealed so far.