Market Ahead, November 2: Top factors that could guide markets this week

The benchmark indices fell around 2.5 per cent last week following a global rout in equity markets. And, owing to the forthcoming US elections, on November 3, global cues will continue to remain a key driver for the domestic markets.

Today, the markets will first react to Reliance Industries and ICICI Bank's quarterly earnings, while auto stocks could also see some reaction following October sales data.

Reliance Industries on Friday reported a 15 per cent drop in its second-quarter net profit at Rs 9,567 crore on the weak oil business. Meanwhile, ICICI Bank’s net profit rose almost six times to Rs 4,251 crore on account of growth in net interest income and low tax burden.

Meanwhile, volatility is expected to grip the markets owing to the overhang of US presidential polls and uncertainty over global growth due to resurging cases of coronavirus in the US and Europe. Last week, India VIX surged to close at 25 levels.

Besides, Fed interest rate decision on November 5 and PMI data for the US, the UK and China will also be tracked by investors.

Back home, quarterly earnings from over 600 companies including HDFC and Punjab National Bank and auto sales numbers this week will prompt individual stock moves.

PMI data for the manufacturing and services sector will also be released this week, which would also influence sentiment.

On the Covid front, India reported a daily jump of 45,928 Covid-19 cases on Sunday, as per Worldometer website, taking the tally to 82.29 lakh. The country's death toll has mounted to 1.22 lakh.

And now, let's take a look at the trade setup for today.

Underwhelming outlooks and results from some of Wall Street's largest companies last week further soured the mood and dragged U.S. stocks lower last week. On Friday, the S&P 500 lost 1.2 per cent, the Nasdaq dropped 2.45 per cent while the Dow fell 0.6 per cent.

Asian shares extended losses on Monday on worries about global demand as many economies slid back into coronavirus-induced lockdowns while upcoming U.S. presidential elections led to heightened caution.

On Monday, Japan's Nikkei was up 0.6 per cent. Australian shares were down 0.1 per cent while New Zealand's benchmark index eased 0.6 per cent.

Oil prices hit five-month lows. Brent crude LCOC1 to a low of $35.74 per barrel, a level not seen since late May.

Bank stocks are expected to be in focus today as the Supreme Court will resume hearing in the loan moratorium case. Last week, the central government asked lenders to credit the difference between compound interest and simple interest for six months of moratorium period on loans up to Rs 2 crore.

And, Equitas Small Finance Bank will debut at the bourses today after the issue price was fixed at Rs 33 per share. The Rs 518 crore public issue was subscribed 1.95 times during October 20-22.