InvestorQ : What are the major trading cues for the trading week commencing on 17 August 2020? Do you see the markets bouncing?
NISHA Nayak made post

What are the major trading cues for the trading week commencing on 17 August 2020? Do you see the markets bouncing?

Answer
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Priyanka N answered.
1 month ago


The coming week is likely to be an interesting week as the markets absorb the full impact of key macro announcements like CPI inflation, WPI inflation, and IIP and trade data. COVID will continue to be a key driver for the week as numbers continue to stack. Here are the cues.

· COVID afflictions in India are now more than 2.6 million and that becomes a challenge despite the recovery rate touching 68%

· CPI inflation at 6.93% will exert pressure on financial stocks as they will be cautious on fears that the RBI may be inclined to put off rate hikes to December and beyond

· Lower RBI dividend at Rs.57,182 crore raises the spectre that the actual fiscal deficit for FY21 could be closer to 7%. That is a negative for sovereign ratings.

· MPC minutes on 20 August will give a greater clarity on of what the members of the MPC actually think about inflation and the rate trajectory

· Quarterly results announced till date for Q1 in the case of 47 out of Nifty 50 companies hint at worst quarter in years due to weak demand and supply constraints

· FII flows continue to be robust in equities even as MFs are sellers. But the big news is the huge inflows by FIIs into Indian debt, which is a signal of risk on investing

· AMFI data on equity fund flows negative in July and the stress could have larger implications for mid cap and small cap stocks

· There could be conclusion to the AGR case and though not much is expected, any negative implication could be bad for telecom companies

· As US-China tensions simmer, both China and the US are planning stimulus programs and that could give the much needed boost to liquidity

· The positive shift in IIP for consumer non-durables is a signal that FMCG companies may be back in the top buy list in the coming weeks

Key global data triggers will include US Housing starts, US building permits, API weekly crude oil stocks and Japan exports and China rate policy.