India will be entering an important week which will include the Budget announcement and the reaction of the markets to the G-20 Summit that concluded in the previous week. Here are some of the major cues for the coming week.

· The first big cue for the week will be the G-20 Summit that concluded last week. The US and China have entered into a temporary truce on the trade war front. While the US has agreed not to impose further import tariffs, China has agreed to again permit US imports into China. This should favour Indian markets and one can expect a gap up opening due to this positive factor.

· However, the trade impact of the summit will be short term and will only impact the first half of trade. The bigger trigger will be the expectations from the budget. Already, there are expectations of a boost to consumption through cut in income tax rates and greater exemptions. These are likely to be positive for consumption stocks.

· The week you can also expect further announcements on the 5G front including the tentative dates for the 5G auctions as well as the dates for testing. This should become smoother with the sanctions relaxed by the US on Huawei. This could have larger implications for telecom stocks in the market.

· The government has already indicated major shifts in the PSU policy. Markets are expecting a time table for hiving off Air India, BSNL, and MTNL etc. Banks could benefit from expectations of a higher recapitalization provision for bank balance sheets. In fact Power PSUs could also be watched out for M&A benefits.

· The big trigger this week will be the auto sales numbers for the month of June. These numbers have been discouraging in the last few months and the markets will be looking for some indications of bottoming out of auto demand.

· Apart from that, the other key macro variables that will be announced include the Core Sector Numbers for May and the PMI Manufacturing and PMI Services for the month of June. These will be important cues for the manufacturing sector and will also be important cues for the future trajectory of GDP growth and IIP growth.

· Over the week end, the government also announced the current account deficit for the full year at 2.1%, which is higher than the previous year. However, Q4 current deficit has been sharply lower supported by strong FPI inflows and also foreign remittances from Indians living abroad. However, the fiscal deficit has touched 52% of full year target in the first 2 months of the fiscal itself and that is a major negative for the markets as it puts pressure on the fisc and the interest rates in the market. This could work against banking, NBFC and rate sensitive stocks.

· The all-important meeting of the OPEC plus Russia will happen on Monday and Tuesday at Vienna. Russia has agreed in principle for a 6-9 month extension of the quota cuts and combined with the growth revival expectations due to the end of the trade, this could lead to higher crude oil prices. In fact, market traders are already talking about Brent Crude getting back to the $70/bbl level in the next fortnight. That is not exactly great news for the Indian markets.

· The progress of the monsoons will be a key factor. As of the last week, the monsoons had still left a deficit of 24% and the impact on the cropping is still to be known. This will be a key input for the food inflation number.

· At a more structural level, the NBFC issue will also hold the attention span of traders. The SEBI board meeting has made the pledging process more difficult and that may close doors for the promoters. With September approaching, the markets may be keenly watching how the likes of Essel and DHFL manage to repay the bonds issued to mutual funds. This remains the big issue for markets.

· Finally, the option cues are still hinting at a major resistance for the Nifty at 12,000 with most of the call accumulation at that level strike. Traders will be looking at a shift in strikes to higher levels before committing to bullish positions in the market.