Both benchmarks Sensex and Nifty saw a good recovery last week and rallied over 1 per cent each. The focus this week, though, will squarely be on the broader market as many mid- and small-cap stocks are set to receive a boost after the Sebi tweaked rules for multi-cap mutual funds.According to the new norms, multi-cap funds must hold at least 75 per cent of their assets in equities with 25 per cent each in large, medium and smaller companies.
However, in a clarification on Sunday, the regulator gave various options to the fund managers to meet the norms and set the deadline for the same as January 31, 2021.
Apart from that, investors in the coming week will closely follow developments surrounding India-China border tensions, key macro data release, global indices, and upcoming US Fed meet.
Both India and China last week agreed on a five-point plan to resolve the border tensions in eastern Ladakh, and now all eyes will be on the actual disengagement of forces on the Line of Actual Control.
Later this week, the US Federal Reserve will hold its two-day policy meeting where it is expected to hold rates while elaborating on the already-announced shift to inflation targeting. The Bank of Japan and the Bank of England will announce their respective policy decisions on Thursday.
Back home, more than 1,000 companies, mostly smallcaps, will announce their results in the first two days of this week. Apollo Hospitals Enterprise, Future Retail, HUDCO, PVR,and Anant Raj, are among the 446 companies to announce quarterly earnings today.
BHEL's consolidated net loss widened to Rs 893.14 crore for the quarter ended June as coronavirus-induced lockdown had an adverse impact on its operations. Meanwhile, IRCTC reported a net loss of Rs 24.60 crore in the quarter under review. The stocks of both these companies will react to their respective results today.
Market participants will also react to IIP numbers, released over the weekend, followed by CPI and WPI inflation data which are scheduled to be released today. Industrial production shrank by 10.4 percent in July, mainly due to lower output of manufacturing, mining and power generation sectors, official data showed on Friday.
This week will also see the listing of Happiest Minds Technologies at the bourses, although there is no clarity on dates yet. The final issue price has been fixed at Rs 166 per share, the upper end of price band.
On the Covid-19 front, India's tally of cases sprinted past 48.4 lakh, while the death toll climbed to 79,754, according to Worldometer. Meanwhile, British clinical trials for the AstraZeneca and Oxford University coronavirus vaccine have resumed after green light from safety watchdogs. The late-stage trials of the experimental vaccine, one of the most advanced in development, were suspended this week after an illness in a study subject in Britain.
The development sent Asian shares higher on Monday, with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.5 per cent. Both Australian shares and Japana's Nikkei were up 0.5 per cent.
The Indian markets are also set to open higher, on the back of favourable cues from Asian indices.The SGX Nifty was last trading at around 11,490 levels, up 30 points.