Markets week ahead: Q1, Covid-19, F&O expiry will guide markets

Investors can expect busy schedule next week as pandemic concerns, earnings release, weekly and monthly derivatives expiry will play out. Also, the simmering tension between the US and China will look destabilise financial markets.
India’s benchmark indices ended the Friday’s session lower, but managed to pull off sixth straight weekly gains led by IT stocks and oil-to-telecom giant Reliance Industries (RIL) surge to fresh life high.
The Sensex ended 11 points lower to 38,128 while the Nifty50 index ended at 11,194, down 21 points. Broader markets ended little unchanged as compared to the benchmarks, Nifty Midcap 100 index ended 0.28 points lower while the Nifty Smallcap 100 index ended 0.22 points  higher.
Locally, earning releases from giant such as RIL are going to provide excitement while global cues will continue to be the guiding force.

The spreading of Coronavirus cases is another factor that investors are not finding any comfort. The number of infected cases has crossed 1.2 million mark and the rate of growth picking up the pace. With the country looking to further ease some of the restrictions imposed since March 22, the rising number of infected cases is not a good sign.
Globally, the US-China spat, FOMC Meeting, economic data release, Brexit, April-June quarter earning release, among other will be key factors to watch.

The risks to US economy outlook have grown and the Fed may be ready to do more.  After an unexpected rise in jobless claims and as US coronavirus cases continue to spread across the Sunbelt, concerns are growing that the economic recovery is stalling.  The Fed may signal their emergency programs are not going away anytime soon and announce a new maturity composition of Treasury purchases.  Interest rates will remain near zero for a few years and the Fed may need to signal their actions will also keep long-term yields grounded.

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