Global cues, geopolitical developments to set tone for equity markets: Analysts

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Published: June 28, 2020 12:44 PM

Participants will also track macroeconomic signals like PMI data for the manufacturing and services sectors, scheduled to be announced during the week, they added.

equity markets,global markets, PMI data, PMI data for manufacturing, Religare Broking, covid 19 cases, US-Sino trade talks, S&P Global RatingsMarkets have been on an upswing for the past few sessions, shrugging off rising COVID-19 cases and weak growth forecasts.

Trading in the equity markets this week will be guided by global cues, geopolitical developments and trend in coronavirus cases, analysts said. Participants will also track macroeconomic signals like PMI data for the manufacturing and services sectors, scheduled to be announced during the week, they added.

“From here on, for India, the pace of return to normalisation would be the key along with trends of coronavirus case curve. Border tension with China would also remain a monitorable,” said Shibani Sircar Kurian, Executive VP, Fund Manager & Head- Equity Research, Kotak Mahindra Asset Management Company.

“We believe global cues will continue to dictate the market trend, in the absence of any major domestic event. Besides, macroeconomic data and auto sales figures will also be on the participants’ radar.

“Needless to say, they would continue to keep a close eye on India-China border dispute and any news of fresh escalation might not go well with the markets,” said Ajit Mishra, VP Research, Religare Broking. Markets have been on an upswing for the past few sessions, shrugging off rising COVID-19 cases and weak growth forecasts.

S&P Global Ratings had on Friday said the Indian economy is in “deep trouble”, with growth expected to contract by 5 per cent this fiscal amid difficulties in containing the virus, an anemic policy response and underlying vulnerabilities, especially in the financial sector.

Jimeet Modi, Founder and CEO, SAMCO Securities & StockNote, said markets will be significantly influenced by updates on the India-China standoff as well as US-Sino trade talks.

“Geopolitical concerns and possibility of second wave of COVID-19 remains the near term risks which could impact investor sentiments,” said Sanjeev Zarbade, VP PCG Research, Kotak Securities.

During the last week, the BSE 30-share Sensex advanced 439.54 points or 1.26 per cent. “It was a roller coaster ride from the beginning as the fear of the second wave of COVID-19 cases in other countries and rising cases in India kept the markets volatile,” Mishra added.

Other factors like crude oil and domestic currency movement would also be watched. “Investors would keep a close watch on global cues and geo-political tensions between US-China and India-China to get market direction,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Six days after it recorded four lakh infections, India’s COVID-19 tally raced past the five-lakh mark on Saturday with the highest single-day surge of 18,552 cases, while the death toll climbed to 15,685, according to Union health ministry data.

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