Market Ahead, May 26: Top factors that could guide markets this week

Traders in the Indian markets will today return to their terminals after a three-day long holiday. The markets were closed yesterday on account of Eid ul Fitr. For this week, reports on the coronavirus and the lockdown as well as the corporate results and global developments will be the key triggers for the markets. Besides, traders can expect some volatility on account of F&O expiry. The May series derivative contracts will expire this Thursday and traders will roll over their positions to next month.

The fourth phase of the ongoing nationwide lockdown ends on May 31 so traders will heavily focus on reports about the further reopening of the economy. Some industries and railways were already allowed to resume services while domestic aviation restarted yesterday.  However, any decision on lockdown extension is likely to hinge on the trend in Covid-19 infections which have been rising steadily in India. 

India witnessed its biggest single-day spike, with 6,977 positive coronavirus cases being added in the past 24 hours. These take the country's total number of Covid-19 cases to 144,069 and deaths to 4,117, according to data compiled by Worldometer. India has thus entered the list of 10 most affected countries globally by overtaking Iran in total cases.

Meanwhile, corporate results will continue to pour in throughout the week. Investors will first react to HDFC's and other results that were announced over the weekend. The mortgage lender yesterday reported a 22 per cent decline in net profit to Rs 2,233 crore in the fourth quarter. It made provisions of Rs 1,274 crore in the quarter, up 220 per cent on a YoY basis, because of Covid-19.

Today, a total of 19 companies including Deepak Nitrite, Max Financial and Torrent Pharma are scheduled to announce their March quarter results.

On the macro front, GDP data and fiscal deficit numbers for Q1 of the current year will be released on Friday.

Now, let's look at the global cues, Asian shares crept ahead on Tuesday as investors looked past the Sino-US trade tensions to a re-opening world economy. Japan's Nikkei led the way with a rise of 1 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 per cent, while South Korea rose 0.4 per cent. However, the ongoing war of words between China and the US over trade, the coronavirus and China’s proposals for stricter security laws in Hong Kong remains a key monitorable for traders the world over.

In commodities, oil prices were supported by falling supplies. As a result, Brent crude futures rose 12 cents to $35.65 a barrel.

Now, let's look at other top news of the day.

According to several reports, Bharti Airtel's promoter Bharti Telecom is expected to raise $1 billion by selling 2.75 per cent stake in the telecom giant today. Besides, former MD and CEO of YES Bank Ravneet Gill has told the Enforcement Directorate that the bank had sanctioned huge amounts of credit to many corporates that were facing significant stress and liquidity issues.

On the regulatory front, Sebi has extended various regulatory measures, introduced to contain volatility, till June 25. Additionally, it said on Monday that shares in depository account, which may be pledged or repledged, can be used as margin till August 31.

Read by: Kanishka Gupta