Market Ahead, June 29: Top factors that could guide markets this week

After rising over 1 per cent in the week gone by, the Indian markets are likely to start this week on a weak note. The SGX Nifty is indicating a cut of around 70 points for the Nifty at open which is likely to be at around 10,270 levels. This comes amid weakness in rest of the Asian share markets this morning, Japan’s Nikkei shed 1.3 per cent and South Korean stocks were down 0.9 per cent in early deals. Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2 per cent.

In commodities, Brent crude was last trading flat at $41.02 a barrel.

The Indian markets may today react to S&P's warning that the Indian economy is in deep trouble. The rater has projected the Indian economy's growth to contract by 5 per cent this fiscal, citing India's difficulties in containing the virus, an anemic policy response, and underlying vulnerabilities as the reason behind the estimate.

Besides, macro data, geo-political tensions, corporate results, and trend in Covid-19 cases will be other top factors to steer the markets this week.

Investors will especially monitor updates on the India-China standoff as well as the US-Sino trade talks as any escalation will negatively impact the markets 

Meanwhile, the worldwide coronavirus cases crossed the tally of 10 million yesterday, according to Worldometer.  India reported 19,620 new cases to take the tally to 5.49 lakh while the number of deaths reached 16,487. Amid this, market participants will also watch out for any signs of the second phase of reopening although Jharkhand became the first state after West Bengal to extend the lockdown till July 31. 

On the results front, over 1,400 companies are scheduled to announce their quarterly earnings this week. This includes ONGC, Vodafone Idea, MRF, RITES, and SAIL, among others.

On the macro front, Markit India Manufacturing PMI is scheduled for release on Wednesday while the Markit India Services PMI will be released on Friday. June auto sales data will start pouring in front Wednesday onwards. Besides, investors will also watch out for the meeting of US Fed's meeting held on June 9 and 10 which will be released on Wednesday.

Sources have told Business Standard that the RBI's one-time restructuring scheme may not be a blanket relaxation for all sectors of the economy, and the litmus test for qualification could be a clear-cut linkage with Covid-19-induced stress. Firms from the aviation, hospitality, and retail sectors are expected to be allowed to avail of the new scheme, whereas realty, steel, power, and telecom players could be excluded.

Moreover, after sidestepping the idea for the first half of FY21, the Centre is now considering direct monetisation of its fiscal deficit by the RBI in the second half. 

And, in the end, let's have a technical look at the Nifty. Analysts at CapitalVia Global Research say that Nifty might witness resistance in subzone of 10,500, as maximum call open interest is placed here after 10,500. For the weekly expiry, the Nifty is likely to take support at 10,300 as maximum put open interest stands here after 10,000.

Read by Kanishka Gupta