VACCINATION, EARNINGS AND BIDEN – IN THAT ORDER.
It seems like it was just yesterday that we celebrated the New Year and a look at the date shows, we have finished more than a fortnight and very soon the first month will end too.
Its week-to-week for all of us – be it work-from-home, office goers, housewives, children. Even for the stock market, Monday is decisive as it takes stock of what the next four days hold in store.
The markets ended on Friday with a massive over 500-points fall – reason cited was the re-emergence of worry over rising corona in the Western world and resultant lockdowns. Well, the same reason, yet the focus will now be on other things more important.
This week, the market has quite a few events, which will decide its course. First and foremost will be the progress of the vaccination. With 23 deaths in Norway on account of Pfizer’s vaccination, the faith has been shaken; though the company is trying it level best to damage control, right now, we all feel that the vaccination is indeed a shot in the dark; we don’t know whether it will work or whether it will leave impacts or even cause death. If more stories emerge of serious adverse effects of the vaccine, irrespective of all other news, the markets will tank. Lets hope for the sake of humanity that the vaccine works.
Then of course, it will be the earnings which will decide the path. Reliance Inds is scheduled to announce its Q3FY21 numbers on Friday and through the week, we have major companies declaring their numbers- Bajaj Auto, Asian Paints, Yes Bank, Mindtree, Larsen & Toubro Infotech, Federal Bank, HDFC AMC, L&T Technology, Bandhan Bank, Biocon, JSW Steel, UltraTech Cement are some of the prominent ones. The earnings will now reflect the impact of the rising costs but could be offset by festive demand during the quarter.
Then there is the swearing in of the new President of USA – Joe Biden on 20th, Tuesday. All over the world, people will be anxious to see what his first announcements could be – in all likelihood, it will be about the much needed action on the pandemic. But what Biden does after he takes charge will be very eagerly watched.
There will be a lot of action in the primary market, what with two issues opening up – Rs.4633 crore IPO of Indian Railway Finance Corporation and Rs.1176 crore IPO of Indigo Paints. The first month of the year and Rs.5800 crore worth IPO – this holds the promise of more action in the primary market in coming weeks.
Over and above all this, like an overhang of a dark which promises rain any moment, the Union Budget has an omnipotent effect. From next week, all talk will be about expectations and during this run-up rally to the Budget, we typically see only traders and no investors; thus next week or two will see consolidation, more trader based volatile action. That is how it has always been historically.
Well, that’s how the week looks from where we stand today. But after Covid, we see nothing as clearly and lets see how these events actually unfold.