Uttaresh Venkateshwaran Moneycontrol News
Investors will look for cues from F&O expiry, November auto sales, GDP and state elections along with global developments around Brexit and Italy in this week.
On Thursday, F&O contracts for November series will expire and investors will roll over their positions, which usually results in volatility.
Market saw a negative end for last week, with the Nifty giving up 10,550-mark.
"Markets will keep an eye on the state assembly elections in Madhya Pradesh and Mizoram as well as the GDP data. Volatility is expected to continue given these events and also being F&O expiry week. On the global front, markets will focus on the G20 meeting in Buenos Aires next week for cues on the ongoing US-China trade spat, crude oil price movement and movement of rupee against the dollar," Rahul Sharma, Senior Research Analyst, at Equity99 said in a statement.
Here’s a gist of what could keep investors busy this week.
Expiry
F&O contracts for November series will expire on Thursday (November 29). Traders roll over their contracts to the next month on this day and the market tends to see volatile moves due to this shift. Additionally, it could also set the tone for investors’ behaviour for the upcoming month as well.
Auto sales
Automobile companies from December 1 (Saturday) will declare their monthly sales data, a key metric to gauge consumer sentiment in the country. Especially, they would watch out for rural trends. Being an election year, it was expected that the government would aim at shoring up rural demand and announce policies that would be rural-centric.
The data point is also significant as October sales were mixed with disappointing numbers from marquee names. With festive season demand being factored in for November, the sales could get a boost.
Macro data
Among key macros, India will announce gross domestic product (GDP) for the September quarter on November 30. Along with it, the Street could eye global economic data as well.
For instance, Japan will announce manufacturing PMI on November 26 along with US GDP for Q3 of 2018. The US Federal Reserve’s minutes of meeting will be out, a commentary eyed by traders to understand the trajectory that the central bank has adopted.
Euro area’s business confidence and unemployment data will also be declared in the upcoming week.
Global cues
The market will look for any fresh cues on the trade war between US and China, which has dominated headlines for some time now. This has also raised concerns of a global economic slowdown. Leaders of both nations will now meet at G-20 meeting in Argentina at the end of the month and developments from this meet will be eyed by investors.
Additionally, the situation in Italy, where the government is under pressure to tweak its heavy spending-oriented Budget as it ‘sleepwalks into instability’ is a cue for market participants.
Developments around Brexit will also be in focus as Theresa May is headed to Brussels for a special European Union (EU) meeting, where she is expected to sign off the Brexit deal.
Corporate action
Boards of several companies will be meeting over the course of this week to either discuss financial results or other corporate actions.
Rain Industries, Sadbhav, Polyplex and Jamna Auto, among others, could be in focus as they discuss an interim dividend issue. Arvind’s board will meet to discuss a de-merger.
HEG will be on investors’ radar as the board will discuss its buyback issue as well, along with NHPC and Oil India.
Few companies such as GIC Housing Finance, Reliance Capital and Videocon Industries will declare their results.
State elections
Action around state elections is in full swing and this week will see Madhya Pradesh and Mizoram going to polls on November 28.
Mizoram Assembly has 40 seats and is currently led by Congress Chief Minister Lal Thanhawla. The central Indian state, on the other hand, has a total of 230 assembly constituencies. It has had a BJP government since 2003. The tenure of the Chief Minister Shivraj Singh Chouhan-led government will conclude on January 7, 2019.
Crude price movement
Even after falling to its lowest level in more than a year, oil price will remain on investors’ radar. Analysts do not see a bottoming out of prices anytime soon, while global slowdown fears are haunting traders.
The commodity has fallen over 30 percent in the past seven weeks, according to CNBC.com and analysts told the portal to wait to play oil’s downslide till there is an OPEC reaction.
Rupee in focus
The rupee rallied 77 paise to end at 70.69 against the US dollar on Thursday, in lock-step with softening crude oil prices and foreign capital inflows
Movement of the Indian rupee as compared to the US dollar will be in focus for investors. The currency has appreciated by over Rs 2.2 on the back of increased dollar selling and softer crude oil prices.
On a year-to-date basis, the rupee is down around 11 percent, against 15 percent fall that the currency had seen during the year.
Technical factors
The Nifty formed a Bearish Engulfing kind of pattern on the weekly candlestick charts.
Analysts at HDFC Securities believe that the near term trend is down and there is a possibility of extension of this weakness for the next week.
Next important supports to be watched is at 10,315 levels for the next week, they wrote in their report. But, there is an absence of a sharp downside momentum as it happened in October. “Therefore, this downward correction in the Nifty has a possibility of halting soon at the low points,” analysts further said.
Stocks in News
Reconstitution of S&P BSE Sensex index: HCL Technologies, Bajaj Finance to replace Wipro, Adani Ports in the BSE Sensex effective December 24, 2018.
HDFC Standard Life Insurance Company: Board appointed Rushad Abadan and James Aird as Alternate Directors to Sir Gerry Grimstone (Non Executive Director) and Norman Keith Skeoch (Non Executive Director), respectively.
Strides Pharma Science: Company approved the participation of Strides in the Series B fundraiser of Stelis Biopharma Private Limited with a commitment of $15 million in a $100 million fund raise. Strides currently own 36.25% stake in Stelis, the former biopharma division of Strides.
Adani Enterprises: Company incorporated a wholly owned subsidiary (WOS) namely, Mundra Copper Limited.
Infosys: EdgeVerve Systems, a product subsidiary of company, successfully implemented the ProximityPayEdge Digital Payments solution, to provide RCB Bank's customers with a digital wallet for secure contactless payments.
AU Small Finance Bank: Board approved to augment the capital by issue of Basel II compliant, Tier II, Non-Convertible Redeemable Bonds in INR, being classified as subordinated debt in one or more tranches upto Rs 500 crore including green shoe option.
IL&FS: The company is unable to pay short-term deposit including interest worth Rs 218 crore due November 22.
Cairn: Income Tax Department recovers Rs 5,500 crore by selling company's shares in Vedanta; Out of 18 cr shares attached by I-T Department, I-T now left with 25 lakh shares which will be sold shortly - CNBC-TV18 sources.
Sundaram Multi Pap: Company has received BB- (Stable) credit rating from CARE Ratings.
Indian Card Clothing: Vinod Vazhapulli - Manager, designated as the Chief Executive Officer tendered his resignation from the said post.
Vipul Organics: Company has received a No-Objection Letter from the BSE, with respect to Scheme of Amalgamation of Efferchem Private Limited with itself.
Shree Rama Multi-Tech: Board decided to sell/ dispose of assets of Ambaliyara plant situated at Village Ambaliyara, Gujarat.
IOC: According to CNBC-TV18 report, the company is expected to meet 9 MT crude import target for FY19 from Iran.
IIFL: lnfoline Finance planning to raise up to Rs 5,000 crore through non convertible debentures.
Jet Airways: Ranjan Mathai quits Jet Airways board as independent director.
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