Weekly Trigger (May 17 – May 27)

weekly 4 Weekly Trigger (May 17   May 27)

Trigger for the WeekHow will it impact?
·        Nifty continues to face resistance at around the 15,000 levels·        Despite VIX staying close to the 20 levels, the Nifty level of 15,000 will remain the big resistance for Nifty
·        COVID cases let up, but rural spread a worry for markets·        Rural spread could hit sectors like tractors, FMCG, two-wheelers, fertilizers, farm inputs, agrochemicals, etc
·        Not much respite seen in COVID cases at an all India level·        COVID cases have tapered from 4 lakh to around 3.3 lakh but hinterland impact is a worry for rural demand
·        Big results expected to hit the market this week·        Big names include Bharti, Tata Motors, Hindalco, SBI, IOCL, Shree Cements, Colgate, and Canara Bank
·        Solid data from IIP and inflation failed to enthuse the markets·        Markets are unlikely to be impressed by high IIP and low CPI inflation as they will discount the base effect
·        SBI results likely to surprise the markets on the upside·        Good results are more likely due to huge provisions made in the corresponding quarter on base effect
·        Commodity inflation will be on the radar of the markets this week·        While this has favored commodity companies, it is expected to hit demand from user segments soon
·        Indian metal and chemical stocks will be in focus on China story·        With China planning to lower carbon footprint in a big way, the metal and chemicals sectors could be in focus
·        FIIs pull out Rs.8,700 crore in May on rising pandemic cases·        At this rate, the FPI outflows in May are likely to cross April and even domestics are not giving support in May
·        Heavy call writing on the Nifty at the 14,900 and 15,000 strikes·        This is a clear indication that traders are not betting on a rally, and that would be a technical overhang this week
·        WPI inflation to be announced on 17 May will be a big data item·        With rising commodity prices, WPI inflation is assuming a lot of importance giving a hint of input cost pressures
·        Midcap and small-cap indices fall sharply in the week·        There is worry on mid-cap and small-cap valuations at higher levels, which will be an overhang next week
·        Key data points from the US macros will be watched this week·        Focus on Housing Stats, Building Permits, FOMC Minutes and jobless claims, home sales, PMI Flash for May
·        Key data points from Europe and Asia will be keenly watched·        Focus on Euro GDP, inflation, ECB stability review, PMI Flash; Japan GDP, machine tools orders, IIP; China IIP

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