Triggers Weekly Aug 3rd – Aug 7th

Triggers Weekly 2 Triggers Weekly Aug 3rd   Aug 7th

Trigger for the Week

How will it impact?

  • Daily COVID afflictions cross 55,000 mark during the week
  • The COVID cases have spurted with more aggressive testing and could mean delays in Unlock 3.0
  • Nifty 11,200 will continue to be the resistance for the markets
  • Despite repeated attempts, Nifty has been unable to scale beyond 11,200 and VIX is already at 25 levels
  • Core Sector growth at (-15%) hints at some sequential improvement
  • There could be some hope for sectors like cement and fertilizers where traction is visible in Jun-20 data
  • Response to Mindspace IPO to boost IPO market sentiments
  • Mindspace REITs got oversubscribed 13 times with good appetite from institutions and non-institutions
  • Auto numbers show revival with best traction in two-wheelers
  • Even as cars are getting back to normal, the big rural thrust is visible in the two-wheeler demand
  • GST revenues fall by 14%, hint at continued stress on revenues
  • This means that the fiscal deficit for the year could get closer to 7% for the year, meaning pressure on ratings
  • Decision on extension of loan moratorium could hold the key
  • EMI moratoriums expire on 31 August and markets are expecting an extension till December 2020
  • Banks disappoint on earnings, IT stocks show traction
  • That dichotomy was visible in July and could continue in the coming week too in the stock markets
  • Indian crop planting rises 14% on early monsoon onset
  • This is likely to be a boost for rural stocks as rural incomes will benefit from higher output this year
  • Markets will await new PSU policy with strategic sectors redefined
  • With LIC IPO already in the works, this could create a time table for aggressive divestment of PSUs
  • All eyes will be on the RBI as it announces monetary policy
  • A rate cut of 25 bps is factored in but rate sensitive stocks will be looking on liquidity infusion outlook
  • Futures rollover in the expiry shows complacency and optimism
  • Complacent rollovers are normally a signal of a temporary top in the markets; a time for caution
  • With most large cap results done, the week will be about mid caps
  • Key mid-cap results include Canara Bank, BEML, VST, BSE, Unichem, CERA, Sobha, Balrampur, JSW Holdings
  • Markets will look for global data triggers from US, EU and Japan
  • PMI data, July inflation, US-ISM, Trade balance, US Factory orders, Crude inventories will hold the key

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