Key events next week in India and around the world

After the June meeting, it was reported that the RBI, like most central banks across the world, is looking to pare the pandemic-era stimulus by raising the repo rate and gradually withdrawing surplus liquidity from the banking system.

American brokerage Bofa Securities in a recent report said the rate-setting panel will go for a 0.35 percent hike in the key repo rate at its meeting next week. It has also said the hike will be accompanied by a change in the policy stance to "calibrated tightening” from "withdrawal of accommodation".

The brokerage also said there is a possibility for MPC to adopt a more aggressive measure and deliver a 0.50 percent hike in rates like it did in June, joining some developed market and regional central banks who have sent out more decisive signals.

The MPC had raised the repo rate by 50 basis points in June after a 40-basis point hike in an off-cycle policy meeting in May to combat soaring inflation. The repo rate currently stands at 4.90 percent. (One bps equals one-hundredth of a percentage point).

Week ahead earnings calendar in India (August 1-6):

The listed Indian companies that are scheduled to release their Q1 earnings are:

Zomato, Escorts, Bajaj Consumers, Eveready, Goodyear, ITC, Ramco Cement, TBZ, Thryocare (August 1); Bank of India, Bosch, Dodla, GATI, Godrej Properties, Voltas, (August 2), Adani Power, Adani Transmission, Idea, Indigo, Biogen, Lupin (August 3); Adani Enterprises, Berger Paint, BHEL, Britannia, Bluestar, Dabur, Dalmia Bharat, Edelwiess, GAIL, HCC, LIC Housing Finance, Manappuram, NDTV (August 4); Alkem, Daichi, Fortis, Nykaa, Paytm, Pfizer, Raymond, Titan, UCO Bank, (August 5); Amara Raja Batteries, Marico (August 6).

Companies to offer dividends next week:

Abbott India

Abbott India has announced a special dividend of 1300 percent (ie Rs 130/ share) and a final dividend of 1450 percent (ie Rs 145/share). The record date is August 4 and the ex-dividend date is August 2, 2022.

Maruti Suzuki

Maruti Suzuki declared a final dividend of 1200 percent (Rs 60 per equity share). The record date is August 5 and the ex-dividend date is August 3, 2022.

United Breweries

United Breweries declared to its shareholders a final dividend of 1050 percent (Rs 10.5 per equity share). The record date is August 5 and the ex-dividend date is August 3, 2022.

Bata India

Bata declared two bumper dividends for its investors - a special dividend of 1050 percent (Rs 50.50 per equity share) and a final dividend of 80 percent (Rs 4/ share). The record date is August 5 and the ex-dividend date is August 3, 2022.

India Vice President elections on August 6

The Vice Presidential poll will be held on August 6 to elect the successor to M Venkaiah Naidu, whose term ends on August 10. It is a contest between NDA government’s nominee Jagdeep Dhankhar and Opposition parties' nominee Margaret Alva.

Lok Sabha likely to have debate on price rise (August 1):

After a near washout of House proceedings for two weeks, Lok Sabha is likely to have a debate on price rise on Monday, followed by Rajya Sabha on Tuesday, PTI reported on July 29 citing political sources. Since the beginning of the session on July 18, the Opposition in both the House had been raising the issue of rising prices and GST, leading to near washout of proceedings.

Maldivian President to visit India next week, to meet Murmu, Modi

Maldives President Ibrahim Mohamed Solih is set to visit India next week to review the progress made in this wide-ranging partnership between the two countries. During his India visit, Solih will meet President Droupadi Murmu and hold talks with Prime Minister Narendra Modi. India’s “Neighborhood First” policy and Maldives’s “India First” policy work in tandem to tackle shared concerns and advance mutual interests.

World Economic events - Macroeconomic Data/Month-end data

A host of key events such as the US jobs report, companies' earnings reports, and OPEC+ meeting in the first week of August could have an impact on stock markets.

The release of worldwide manufacturing and services PMI data for the month of July may give an insight into global growth, inflation and labour market trends.

Bank of England rate decision (August 4):

Bank of England is scheduled to meet on August 4. Policymakers raised rates in the last five meetings. The BoE in its last meeting hiked its main interest rate for a fifth straight time, as it forecast British inflation to soar further this year to above 11 percent.

They may opt for half-point rate hike. Concerned over the rapid rise of consumer price inflation to a four-decade high of 9.4 percent, and emboldened by increasingly aggressive policy stances at the FOMC and ECB, the BoE is set to hike interest rates by another 50 basis points.

BoE Governor Andrew Bailey also on July 19 said that the bank is likely to consider raising interest rates by half a percentage point at its next meeting to help control inflation.

US jobs report (July) on August 5:

The US economy added 372,000 jobs in June, a better-than-expected boost to the labor market. The number was in line with the average gain over the past few months, including 368,000 in April and 384,000 in May. The unemployment rate was 3.6 percent, the same as a month earlier, the Labor Department reported.

The US labour market remains solid overall as the private sector has now regained its pre-pandemic number of jobs, while public sector remains 664,000 jobs below February 2020. Other than the public sector, no industry lost jobs in June, on a seasonally adjusted basis.

A look at next week's key economic events/data:

August 1: Worldwide Manufacturing PMIs (June), Eurozone unemployment rate (June), US ISM Manufacturing data PMI (July), Construction Spending (June), Australia Inflation (July)

August 2: India Balance of Trade (July), Reserve Bank of Australia rate decision, Canada Manufacturing PMI (July), Speech by St. Louis Fed President James Bullard

August 3: Australia Retail Sales (June), Eurozone Retail Sales (June), US ISM non-Manufacturing PMI (July), OPEC+ meeting, US crude: EIA weekly oil inventory report

August 4: Australia Balance of Trade (June), UK Interest Rate decision, Canada Balance of Trade (June), US Balance of Trade (June), Jobless Claims (July)

August 5: India RBI Interest Rate Decision, Australia RBA Statement on Monetary Policy statement, Japan Household Spending (June), Canada Unemployment Rate (July), US Non-farm Payrolls (July), Unemployment Rate (July), Consumer Credit (June)

Key overseas companies' earnings to watch out for:

On the earnings front, HSBC, BP and Rolls-Royce are scheduled to give their half-year updates, while Starbucks 2Q, BP 2Q, Uber Q2, Airbnb Q2 (August 2), Moderna Q2 (August 3), Alibaba 2Q (August 4) will report their Q2 numbers.

OPEC+ meeting on August 3:

There is a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+ on August 3. Analysts said it would be difficult for OPEC+ to boost supply, given that many producers are already struggling to meet production quotas.

OPEC+ sources, according to a Reuters report, said the group will consider keeping oil output unchanged for September, but two OPEC+ sources also told Reuters a modest increase would be discussed.

UK Tory leadership debate between Liz Truss and Rishi Sunak (August 4)

Rishi Sunak and Liz Truss are the two finalists in the race to succeed Boris Johnson as the Conservative Party leader and British Prime Minister. They will participate in a debate on Sky News on 4 August. And then, the two leadership candidates will travel around the UK to try to persuade party members to vote for them at a series of 12 hustings.

Blinken to attend NPT review conference in New York

The upcoming review conference of the Nuclear-Nonproliferation Treaty (NPT) is scheduled to be held in August in New York. The United States reaffirmed its commitment to the Treaty on the Non-Proliferation of Nuclear Weapons, with a U.N. review conference on the pact, Secretary of State Antony Blinken had said earlier in the month.

Joined by about 190 countries, including both nuclear and nonnuclear states, the treaty is the world’s most widely ratified nuclear arms control agreement. Its review conferences had been held every five years from 1975 to 2015. The meeting, originally set for 2020, has been pushed back repeatedly due to the coronavirus pandemic.