Weak Week ahead for the Markets? – Rajesh Agarwal Jindal

rajeshagarwalThe markets are expected to start the week on a subdued note due to profit booking by investors. The services PMI numbers would be declared on the last trading day of the week which is expected to impact the Indian bourses near the close of the week. The Indian bourses are also likely to be impacted by the important result announcements during the week. ICICI Bank, NTPC, Bajaj Corp, JSW Steel, Bank of Baroda, Dabur India, Hindustan Unilever, L&T, UPL, Bharti Airtel, IDFC, ITC, Ranbaxy, CESC, Container Corp, Dr Reddys Lab, DLF, HDIL HCL Tech and Aban Offshore, are expected to declare their Q1 FY15 earnings this week. The markets will be closely watching the macro developments in US and Europe. Overall, We expect markets to hover in the green zone during the week with its fair share of volatility.

Coming to sectors we expect to see some action in NBFC sector as a consequence of partial taxation relief extended to the mutual fund industry and approval of 49% FDI in insurance. IDFC, Bajaj Finserv and Reliance Capital are likely to be impacted. Sugar stocks are also likely to remain in focus as the government has rejected the demand to hike import duty on sugar to 40%. We also expect to see some movements in Banking stocks following important result announcements.

An important event to keep watch for the week is the expected signing of the protocol for an agreement on trade facilitation by July 31 as per the agreement reached by WTO trade ministers in a meeting in Bali last December. This will have an impact on India’s foreign trade. India maintains its stand on not supporting an agreement on trade facilitation at the World Trade Organisation till its concerns on food security are met.

On the global front, ongoing unrest in the Middle East and Ukraine will continue to keep investors on their toes for any developments that could have a wider impact on risk sentiment of the investors. We expect the US markets to start the week on a restrained note. Market participants are expected to remain cautious, with a wait-and-watch attitude ahead of announcement of another set of U.S. indicators due in coming days, including second quarter GDP. Sanctions and escalation fears are expected to keep the European markets volatile. The Asian markets are expected to trade with some amount of volatility as investors remain cautious of the intensifying conflict in Middle East.

The world markets would also be impacted by a number of economic data that would be announced during the course of the week. Some of the important data announcements during the coming week include the US Jobless Data, US Manufacturing PMI, US Mortgage Rates, US GDP Growth, US Pending Home Sales & Chain Stores Sales, US Manufacturing PMI,  Japan Unemployment Rate, Japan Industrial Production, EU Core Inflation and Unemployment Rates, EU Industrial & Economic Sentiment and EU Business & Consumer Confidence.   

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(Working as Head-Research at Eastern Financiers Ltd, am a post graduate in commerce from Calcutta University, and have gained wide experience in the last 18 years. Prior to joining Eastern Financiers, I have gained in depth knowledge of the Financial Markets while working with Capital Market Publishers, Lohia Securities & CD Equisearch. As head of the Equity Research Wing, I appear regularly as Guest Analyst at CNBC, Awaaz, CNN-IBN, NDTV Profit , Zee Business,Bloomberg UTV, ET Now & R Plus.)