Triggers Weekly – 06th Dec 2020

Triggers Weekly 3 Triggers Weekly   06th Dec 2020

Trigger for the Week

How will it impact?

  • Accommodative stance of monetary policy will be the driving force
  • Markets reacted positively to the stance on Friday but the trend is likely to continue during the coming week
  • 13,000 on Nifty and 44,500 on Sensex taken out convincingly
  • There was volume driven breach of both these crucial levels and that is likely to be the new base for indices
  • RBI upgrade of GDP contraction to (-7.5%) positive for industrials
  • This basically implies that the impact on infra and other manufacturing will be much lower than expected
  • Vaccine developments on the Pfizer BionTech front could be crucial
  • With UK giving approval for Pfizer vaccine, other vaccine candidates may push faster. That is positive for markets
  • India reports less than 50,000 cases daily with recovery rate at 94.2%
  • This is one of the best recovery rates anywhere in the world and is a hint that further lockdowns are unlikely
  • Weaker than expected payroll data could trigger US stimulus this week
  • Markets are expecting the US stimulus at a consensus level of $908 billion, a short term boost for markets
  • October IIP numbers to be announced on 11 December
  • The announcement assumes significance after IIP turned around to +0.2% in September IIP data
  • FPI flows continue to remain robust at Rs.10,100 crore in December
  • The first week inflows in December comes on top of Rs.65,000 crore infused by FPIs in November
  • Crude oil at $49.25/bbl a concern for Indian economy as it nears $50
  • With OPEC agreeing on steep supply cuts, oil above $50/bbl looks real. It could pose a macro problem
  • Option writing base remains at 13,000 for puts and 13,500 for calls
  • This hints at a range-bound market with a positive bias as the range has been consistently moving higher
  • Volatility index (VIX) falls sharply during the week to 18.02 levels
  • It is a signal that for the coming week, market will remain a buy-on-dips market with limited downsides
  • Keep an eye on the next round of farmer talks on December 09
  • Government will need to find a quick solution before the Rabi season commences on the MSP assurance front
  • GMP for Burger King IPO will be under the scanner of investors
  • The Burger King IPO was oversubscribed 157 times and the GMP will be a key indicator of the likely listing price
  • Markets will look for global data triggers from the US, EU and Japan
  • US JOLTS, jobless claims, inflation; EU GDP and Interest rates; Japan GDP and machinery orders; China inflation

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