The domestic benchmark indices traded on a volatile note for the sixth consecutive week and lost nearly 2 per cent amid concerns over rising Covid cases and a spike in bond yields.
Volatility is likely to remain high this week too due to the scheduled derivatives expiry of March monthly contracts. In the absence of any major event, Covid-related updates, global cues and bond yields are likely to guide market trajectory this week.
As Covid raises its ugly head again, experts are concerned that India is entering a much stronger second wave with Maharashtra continuing to be the hotbed. India saw its sharpest-ever rise in Covid-19 cases last week, with recorded infections rising by 67 per cent in the country. This concerns investors on D-Street as any lockdown by the government to control the pandemic could hurt India's already fragile economic recovery.
Besides Covid, movement in bond yields will be tracked by market participants. The US 10-year treasury yield jumped to a 14-month high of 1.749 per cent last week despite a dovish stance by the Federal Reserve. US Fed chief Powell will take a few more swings at calming the market’s frayed nerves as he has three speeches lined throughout this week. Rising bond yields don't bode well for emerging markets like India and results in FII outflows.
So far in the month of March, foreign institutional investors have invested a net sum of Rs 8,642 crore in Indian markets. However, they have been net sellers in six out of 14 sessions. Investors will keep a close watch of movement on FII flows as a pullback by them could dent market sentiment.
That apart, oil prices and rupee trajectory could also influence market movement.
Now, an update on the IPO market.
There is no stopping the string of initial public offers that are hitting the primary market, looking to raise funds. After six issues wound up last week, one by Barbeque Nation is set to open on March 24. Besides, four issues from last week are up for listing this week. Shares of Anupam Rasayan are slated to list of March 24, Laxmi Organics and Craftsman Automation on March 25 and Kalyan Jewellers on March 26.
A look at the trade setup for today.
Asian stocks fluctuated at the start of the week, with investors fretting over bond yields and inflation as economic activity picks up. Japan's Topix Index fell 1.5%, Australia’s S&P/ASX 200 Index gained 0.4% while Hang Seng Index fluctuated.
Tracking a mixed setup for global markets, Indian markets looked indecisive as SGX Nifty futures were trading 0.02 per cent higher at 7.35 am.
On the stock-specific front, shares of Future Retail will be in focus after the Future Group moved the division bench of the Delhi High Court against the order passed directed to stay its deal with Reliance Industries.
Adani Green Energy said it has signed definitive agreements with the Toronto-headquartered SkyPower Global to acquire 100 per cent stake in a special purpose vehicle that owns 50 MW operating solar asset in Telangana.
Tata Motors said Marc Llistosella will not be joining as its CEO and Managing Director as was communicated earlier. The auto major had last month announced that Llistosella would be joining as CEO and MD of the firm with effect from July 1 this year.
Competition Commission of India said it has cleared Tata Power's proposed acquisition of 51 per cent stake in North Eastern Electricity Supply Company of Odisha Ltd.
Power Grid Corporation said it has signed a share purchase agreement with Jaiprakash Power Ventures to acquire 74 per cent stake in Jaypee POWERGRID for Rs 351.64 crore.