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NEW DELHI: Last week, a truncated one, saw domestic equity benchmarks Sensex and Nifty rise for the fifth consecutive week, despite headwinds in the form of weak global cues, trade war worries, a falling rupee and firming crude oil prices.
Falling for the first time in five sessions, the indices took a breather on Friday, as profit booking happened at record high levels.
For the week, Sensex and Nifty rose by 0.80 per cent and 0.75 per cent, respectively.
The market’s rise was gradual, devoid of any significant upside move.
The Sensex scaled a record high of 38,487 on Thursday even as the Nifty50 marked its all-time high of 11,620.
The coming week is going to be volatile, as August series futures and options contracts expire on Thursday.
Let's take a look at the key events and developments that may influence market behaviour through the week:Macro indicatorsThe government will June quarter GDP data on Friday and some analysts have projected it to come at around 7.6 per cent.
For the quarter ended March 31 2018, the GDP growth print stood at 7.7 per cent.
July fiscal deficit data will be out on Friday, when the infrastructure output data for July will also be released.
Since the infra sector accounts for roughly 27 per cent of country's industrial output, a higher reading will be considered positive for the health of the rupee.
RBI’s forex reserve data is also due on Friday, which may influence the course of rupee movement.
FO rolloverThe August series futures and options will expire on Thursday and rollover of positions will dominate proceedings through the week, leading to some volatility in the market.
"Muted rollover activity was seen in Nifty futures with Open Interest rising 0.20 per cent on Friday even as Nifty fell 0.2 per cent.
On the other hand, short buildup was seen in Bank Nifty futures, where Open interest rose 2 per cent even as Bank Nifty itself fell 0.7 per cent," said a report by HDFC Securities.
"Nifty open interest put-call ratio fell sharply to 1.63 from 1.73.
Among the options, Call writing was seen in the 11,600-11,650 zone," the report added.
Global cuesLast Friday, US President Donald Trump tweeted that China was "not helping" on denuclearisation of North Korea due to the trade dispute, inviting flak from Beijing, which termed the statement "irresponsible".
Other than the ongoing trade war worries, investors will also watch how the politics shape up for Trump following myriad allegations.
Trump's former attorney Michael Cohen told a federal judge he made illegal campaign contributions at the president's request to silence women alleging affairs with Trump.
The US President also had double trouble after his former campaign chairman Paul Manafort was convicted of tax and bank-related frauds, putting his presidency under threat.
Technical readingsOn Friday, Nifty negated the formation of higher highs and higher lows of last four sessions and formed a small-bodied indecisive candle on the daily scale, said Chandan Taparia of Motilal Oswal Securities.
He noted that the index still maintains its overall bullish bias on the weekly scale.
"The index has been trading in a rising channel with the support of its rising trend line.
It has to hold above 11,550 to witness an upward move towards 11,635.
On the downside, the immediate major support is seen in the 11,500-11,450 range," Taparia said.
Nagaraj Shetti of HDFC Securities said the small positive candle on the weekly time frame had an upper shadow, which signalled a choppy trend.
“The short-term trend remains choppy, and a minor downward correction is likely next week," he said.
Last leg of earningsSome companies are yet to come out with their June quarter earnings.
Prominent among them is Jet Airways.
The stock tanked 8.37 per cent to Rs 275.90 this week ahead of the company's board meeting next week, where it will consider cost-reduction initiatives and a turnaround plan along with June quarter results.
On August 9, the airline's board of directors had deferred Q1 earnings announcement.
Stock-specific actionsTata Motors: The stock may see some traction as Tata Sons has bought nearly 2.6 crore shares from the open market over the past one week after the stock hit a 52-week low following its worst bottom line performance in a decade, according to BSE data.
Jet Airways: The stock is expected to react to decisions of the board meeting and June quarter earnings due next week.
Reliance Communications: The beleaguered telecom company has sought shareholders' approval to enhance its borrowing limits to up to Rs 50,000 crore to meet its capital requirements.
DHFL: DHFL is planning to raise capital to grow its business.
PTI reported that the company plans to raise up to Rs 2,000 crore by issuing bonds on a private placement basis.
PowerGrid: The state-owned power company said it would seek nod from shareholders for raising Rs 20,000 crore through bonds or debentures on a private placement basis at its annual general meeting on September 18.
Stock Market
F O expiry, macro data, global cues to decide market direction this week
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