Last week, both indices turned negative on the back of the big plunge seen on the markets
The outcome of GST Council meet as well as F&O expiry are among the ten factors that are likely to play on the market this week.
Additionally, investors could concentrate on stock-specific moves such as Vedanta and banks, while crude's bearish trend could dominate the set of cues to be watched by D-Street.
Fears of a global slowdown spooked investors across the globe, including India on Friday. Benchmark indices closed at low points of the day, courtesy of intense selling through the day.
Global markets took a beating amid fears of a slowdown in developed economies such as the US and China. Weak handover from Wall Street spilled over to Asian and Indian markets as well.
Apart from global cues, index heavyweights were under pressure, which dragged the indices lower too.
For the week, both indices turned negative on the back of the big plunge seen on the markets.
Here is a gist of ten factors that investors will track for this week.
The upcoming week will see expiry of December series of F&O contracts. Historically, markets tend to be volatile around this time as investors are seen rolling over their positions for the next month.
Given the sharp fall in the market recently, any volatility could spell some trouble for investors. Between the first day of December series and December 21, 2018, Sensex and Nifty have fallen a little over 1 percent.
GST Council meet
Investors will react to the rate cuts announced by the GST Council.
The Goods and Services Tax (GST) Council on Saturday slashed rates on 23 items such as televisions and movie tickets while keeping the tax rate on cement and auto parts unchanged. Additionally, the Council proposed to cut GST rates on six of the items from 28 percent to 18 percent. Retreated Tyres, video games and sporting equipment, movie tickets, billiards and snookers and lithium battery power banks will attract 18 percent GST.
Wheelchair accessories too have been proposed to be brought under 5 percent bracket from 28 percent.
Recommendations of the GST Council's fitment committee on rate rationalisation and balancing revenue flows were considered during the meeting, FM Arun Jaitley said.
The move comes after Prime Minister Narendra Modi promised bringing most of the goods under the 18 percent or lower GST slab. The Council will now meet in January next year.
Crude & Rupee movement
Investors will watch out for movements on the global crude oil prices as well as the rupee. Global slowdown fears have spooked investors, leading to bearish trends on the price of Brent and WTI crude. In fact, the commodity has managed to post one of the steepest falls in a week since June 2016. Brent Crude fell to a 15 ½ month low at 52.79/bbl during the week.
As a result of fall in crude prices, the rupee too staged a recovery from low points. Having said that, traders believe fears of growth in developed economies could start getting reflected in the currency’s movement, going ahead.
Vedanta in focus
Shares of Vedanta are likely to be in focus on the back of a Madras High Court order concerning Sterlite. In a setback to Sterlite, the Madras High Court on December 21 ordered status quo as existed before the National Green Tribunal set aside a Tamil Nadu government order for closure of the company's copper plant in Tuticorin.
Justices K K Sasindhran and P D Audikesavalu of the Madurai Bench also restrained the Vedanta group from taking any steps to reopen the unit.
Hearing a petition against reopening of the Sterlite unit following the December 15 NGT order, the court directed that status quo will continue till January 21 and ordered the state government to inform by then whether it intended to file an appeal against the tribunal verdict.
The Nifty lost half a percent during the week that passed due to sharp correction on Friday and formed Inverted Hammer kind of pattern on the weekly scale.
According to analysts at HDFC Securities, the near-term trend of Nifty is down as per daily and weekly timeframe charts. The nature of downward reversal and a presence of key overhead resistance of 10,900 levels, could lead Nifty to show further weakness for the next week
"Next downside levels to be watched is at 10,550-500 levels for the next 1-2 weeks, before showing another round of minor upside bounce from the lows," they wrote in their report.
Financials in focus
The recently-announced additional capital infusion by the government into public sector banks is likely to keep financials in focus. The sentiment was marred by global sell-off on Friday and investors further could take a note of these developments once again.
The government has sought Parliament's nod for an additional Rs 41,000 crore capital infusion in public sector banks (PSBs) via recapitalisation bonds to support credit growth.
The government had earlier been considering additional capital infusion of up to Rs 30,000 crore in public sector banks as they have been unable to raise required funds from the markets.
Additionally, the commentary from the government is such that a few banks could be taken off the list of lenders that are currently under PCA (prompt corrective action) norms. Under such a situation, several restrictions are placed on banks such as curbs on lending and opening new branches, among others. So, investors could react to this development.
Among stocks that are likely to face corporate action are GDL, which will hold a Board meeting to discuss fundraising. Apart from it, Triveni Turbine is likely to be in focus as its Board discusses a buyback issue this week. Shanti Gear may also announce a dividend or buyback in the upcoming week.
Among key macro data would be minutes of Bank of Japan's Monetary Policy, a cue for Asian markets to react. Along with it, forex reserves data for India will be announced in the second half of next week.
The US-China trade war issue continues to be one of the major factors moving the market. Having said that, the focus could shift to the tensions between the Trump administration and Fed chair Jerome Powell. According to recent reports, the US President is said to be considering firing Powell from the central bank's top job.
Stocks in News
SBI: The bank approved allotment of subordinated, unsecured Basel III compliant additional Tier I Bonds worth Rs 2,045 crore.
Gammon India: The Bombay High Court has disposed off a winding-up order filed by SBI against the company.
Axis Bank: Rajiv Anand appointed executive director, wholesale banking
Fortis: The market regulator has ordered Singh brothers and others to repay Rs 403 crore with interest within 3 months.
Petronet: The company has restructured gas supply contract with RasGas.Amtek Auto: Sebi imposes Rs 15 lakh fine for failing to meet bond redemption deadline