BSE Sensex, NSE Nifty to open on a cautious note as inflation data, Greek developments and companies’ quarterly earnings will decide the course for the stock markets this week.
Investers keep a wary watch on the Greek debt crisis as the latest emergency summit ended with no deal, further prolonging an anxious wait for a resolution and are also watching the Chinese stock markets, which were a bit volatile in early trade after a two-day bounce last week raised hopes of stabilisation following a barrage of government support measures to stem the rout.
On Friday, BSE Sensex fell by 431.39 points in last week to end at 27,661.40 on Friday.
Besides, progress of monsoon, investment trend by foreign investors and the movement of rupee against the dollar would also influence sentiment, say experts.
ACC and MindTree are slated to announce their earnings this week.
“Markets across the globe including Chinese will settle down and Indian markets should start its upward journey on its own merits. The results season will largely have stock specific movements. Markets will remain sideways with positive bias in the short-term and draw directions from the results season,” said Jimeet Modi, CEO, SAMCO Securities.
Last week, country’s largest software exporter TCS reported a meagre 2.1 per cent growth in the June quarter net profit at Rs 5,684 crore, with revenue growth trailing street expectations on difficulties from the Japanese and Latin American markets.
Meanwhile, industrial production in May slowed to 2.7 per cent from 5.6 per cent a year ago, dragged down by manufacturing, strengthening the case for interest rate cut by Reserve Bank of India.
Commenting on progress of monsoon, Prabhudas Lilladher, Head Institutional Equities R Sreesankar said:
“Monsoon always plays a role in determining the sentiments in the domestic market. It is crucial that the monsoon picks up in July and August when significant sowing of the Kharif crops are done.”
The euro steadied on Monday after an early dip while top-rated bonds stayed in demand as the Greek debt crisis seemed set to rumble on for yet another week, though the market mood was helped by improving trade numbers from China.
The moves were mild amid news Euro zone leaders were to reconvene early on Monday to discuss a compromise proposal on a third bailout for Greece.
Japan’s Nikkei managed to bounce 1.1 percent, while MSCI’s index of Asia-Pacific shares outside Japan inched up 0.2 percent.
The single currency quickly steadied at $1.1130 after an initial 0.5 percent drop to $1.1090. Likewise, the euro pared its losses against the yen to stand at 136.41 after an early drop to 135.40. The U.S. dollar barely budged against a basket of currencies at 95.974.
Demand for sovereign debt lifted U.S. 10-year Treasury futures <0#TY:> 8 ticks, while the S&P E-MINI U.S. stock contract lost 0.3 percent.
Aiding the euro were rumours the European Central Bank had agreed to delay a Greek repayment of 3.5 billion euros that had been due on July 20.
Euro zone leaders had told the cash-strapped Greek government it must enact key reforms this week to restore trust before they will open talks on a financial rescue.
Sweeping measures including tax and pension reforms must be enacted by Wednesday night and the entire package endorsed by the Greek parliament before talks could start.
Asian investors were also anxiously watching to see if China’s stock markets could sustain last week’s late rally after a barrage of government support measures.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen was up 0.3 percent on Monday, having ended last week with a gain of 5.7 percent.
China reported exports rose 2.1 percent in June from a year earlier in yuan terms, while imports were down 6.7 percent in a tentative sign global demand might be on the mend. The dollar-denominated figures were not yet made available.
The Asian giant reports domestic product data on Wednesday and forecasts are that annual growth slowed to 6.9 percent last quarter, making it harder to meet Beijing’s target of 7 percent for the whole year.
As if Wednesday were not already busy enough, Federal Reserve Chair Janet Yellen is also due to appear before the House Financial Services Committee.
Last week, Yellen said she still expected a rise in interest rates at some point this year, but repeated concerns that U.S. labour markets were weaker than desired.
In commodity markets, gold failed to get much of a safety bid, easing over a dollar to $1,161.80 an ounce.
Oil prices were under pressure as Iran and six world powers neared an historic nuclear deal that would bring sanctions relief and thus more crude onto the market.
Brent crude was off 99 cents to $57.74 a barrel and U.S. crude eased 89 cents to $51.85.