THE WEEK AHEAD – THINGS LOOK WEAK

People of the world are waiting for a cure or vaccine. The markets are awaiting new triggers.

With no big economic boost expected any time soon, the markets are looking for short term reasons to rise and fall. Afterall, the market is an embodiment of human sentiments and like humans, it needs hope too.

At times when there is fear lurking at the back of one’s mind, it is always best to stay prepared – forewarned is forearmed.  Let’s take a quick look at what could probably be the ‘panic buttons’ which could push the markets downwards. These are broad triggers but under the current uncertain times, broad is all we can be sure about.

Inflation: In terms of macro data, IIP is over and done with. Today evening, we will have the CPI or retail inflation. The food prices rose 9.28% in May and prices are expected to rise further. Under the present pandemic circumstances, one does not know whether RBI will pause or continue with monetary easing as no normal or usual methods hold true currently. Keep a watch on the Trade Balance also, expected on 15^th July.

Q1 earnings: April was complete shutdown and May was partial open. June was a limping back. So the true picture and its impact on India Inc will be visible in Q1 earnings. It is not going to be a pretty picture and this is bound to have an impact on the broader markets. Mindtree and Wipro come with numbers tomorrow and in terms of banks, Federal Bank and Bandhan Bank on 15^th July and also Infosys. HDFC Bank is on 17^th.

RIL AGM: This is as such a very widely looked-forward-to event.  But this time, it will be all the more ‘more watched’ as it’s the first online- AGM. To be held via video-conferencing, it will begin at 2PM. All eyes and ears will be on its future course post these investors coming into Jio and maybe word on the Future Retail deal too.

Primary market:  For those looking at new avenues, an IPO is on the block – Rossari Biotech. It has opened today and read our IPO Analysis to check out – we have given it a thumbs up.

And if you do not have the appetite for an IPO, look at the Govt’s Bharat Bond ETF. This is the second tranche, opening on 17th.

So this is just a broad picture of this week. Of course, the underlying fact that the pandemic is raging wildly and that more states are going for some form of a lockdown or other, is worrisome. As we said earlier, opening and lockdown will be the new normal and companies will have to live this harsh time.

A cure or a vaccine is the only thing which we and the market wants to hear. Till such time that we don’t get that news, everything else will be just hope.