Markets week ahead: Macro indicators, earnings in focus

India’s benchmark indices managed to settle above the crucial level last week. While Sensex scaled 38,000 level, Nifty reclaimed the psychological level of 11,200 in Friday’s volatile trade. The benchmark indices gained around 1% last week.
With RBI’s money policy review out of its way and Covid-19 cases continuing to multiply as record rate, investors focus will evolve around pandemic situation, remaining June quarter earnings, signs of progress on a fresh stimulus package in the US and domestic macro data.

The equity markets are likely to remain volatile, with more stock specific action as the earnings season progresses. Investors would watch out for China’s retaliation which could pull down the market while any announcement of US stimulus could bring some cheer.
During the week, the government will release data on industrial production and manufacturing output for June on Tuesday. Retail inflation data for July will be out on Wednesday. The measure was just above 6%, beyond the comfort level of RBI. Wholesale inflation data will be out on Friday.

The US dollar, which has weakened quite a bit in the past few months, can also have a bearing on various asset classes, including emerging market equities besides the domestic currency.
Commodities have started attracting a lot of global attention as a lot of helicopter money is floating around the world. This superfluous liquidity is being channelled not only to precious metals like gold and silver, but in other metals and commodities too.

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