Buying interest in Reliance Industries, healthcare sector, defensive stocks has lifted tried to calm investor nerves but the fears of escalating global tensions and little benefits expected from the short-term stimulating measures announced by the government forced the benchmark indices to end the week gone by in the negative territory.
DIIs have started pressing the ‘sell’ button on the back of domestic redemption pressures and have sold stocks to the tune of Rs 7,965.50 crore in April alone, highest since March 2016.
This is expected to further accelerate in the times to come, as domestic investors may require liquidity to restart their normal life/operations once the lockdown eases, which is most likely expected from June 1, 2020. FPIs, too, were seen selling aggressively, which is in divergence to their stand in developed markets; since US market has started attracting global capital for risky assets on the back of liquidity and stimulus.
The firm stance taken by governments across the world against China may lead to further deterioration in economic relations, which would keep markets under pressure in the medium term. Absence of good news on the horizon may take markets lower in the coming week.
Quarterly numbers in developed markets, such as the US, are almost over and the commentary from US CEOs and the Federal Reserve Chairman are all pointing towards the fact that the worst is still be ahead of us. Therefore, Indian bourses will mirror their economic trajectory going forward. Investors are advised to stay away from investing new monies and conserve cash.
Markets in both the US and UK are closed on Monday night for Memorial Day and a bank holiday respectively. Indian markets are also closed on Monday
The US will next week see numbers for consumer confidence, durable goods orders, retail sales and PCE inflation, along with the Fed Beige Book. The US March quarter GDP will be revised, but again will mean little.
Decision on lockdown and restarting of the economic activity will be in focus. Broadly banks will be in focus in coming week as the recent RBI action has increased moratorium period till 31st Aug and would further result in slower asset recoveries ahead. Both PSU and private banks may see further weakness ahead.
Some key numbers expected in coming week will be from corporates like Astral Poly, HDFC, Deepak Nitrite, VIP, Torrent Pharma, Dabur, Sun Pharma, United Spirits, Ujjivan Financial, Ceat, Lupin, Radico, TVS Motors, Voltas & Equitas and stock specific action will be seen here
Broadly we expect the markets to remain news flow driven with the broad market trend expected to be range bound between 8900 to 9300 levels.
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