Weekly Trigger (Apr 12 – Apr 16)

weekly Weekly Trigger (Apr 12   Apr 16)

Trigger for the WeekHow will it impact?
·        The week starts with overhang of lockdown in Maharashtra·        The state is likely to go into a lockdown for a longer period, impacting economic activity in a bigger way
·        Mid-caps and small caps did better than the Nifty in previous week·        Nifty returned -1%, Mid-Cap +1.2% and small-cap +2.5% and that trend could continue in the coming week too
·        Action could shift to pharma and FMCG stocks on COVID fears·        FMCG stocks are already back in the radar and pharma could see a comeback as COVID cases rise rapidly
·        Big earnings announcements are expected to kick off this week·        Major results in the week include TCS, Infosys, Wipro, HDFC Bank, Mindtree, ICICI General Insurance etc
·        Focus will shift to the Big-3 IT stocks for earnings guidance·        While TCS does not give guidance, Infosys and Wipro guidance on growth and margins will be the key
·        Bank Index corrected over 4% during the week on lockdown fears·        Apart from rising NPAs, there is also the worry that fund raising via AT-1 bonds could be impacted

 

·        CPI inflation data will be released on Monday 12 April·        Inflation is expected to go up again for March and is crucial as RBI had flagged inflation risk in credit policy
·        IIP numbers will be watched on 12 April for signals of recovery·        After -1.6% contraction in Jan-21, Feb is likely to be a broad repeat as manufacturing struggles
·        Trade data will be released on 15 Apr and the export boost is critical·        While the exports have gone up, the trade data will be watched for oil imports and gold imports data
·        IPO action likely to be absent this week as Macrotech disappointed·        While Barbeque rallied after a tepid listing, the 1.36X response to Macrotech IPO will make issuers cautious
·        Two factors to watch will be the FPI flows and rupee levels·        While FPI flows have been tepid, the INR lost 161 bps in the week after RBI announced GSAP for rupee liquidity
·        Call and put writing strikes move up even as VIX settles lower at 19.78·        Higher option shifts is a sign of bottoming market for the coming week as is the sub-20 levels of the VIX
·        Key data points from the US macros will be watched this week·        Big focus on US inflation, retail sales, industrial output Mar-21, jobless claims, housing starts, building permits
·        Key data points from Europe and Asia will be keenly watched·        Major focus on China Q1 GDP, IIP, retail sales, Japan machinery orders and EU inflation, IIP, EU retail sales

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