Market Ahead, March 8: Top factors that could guide markets this week

The domestic benchmark indices swung back to the green last week, adding over 2 per cent, aided by improving macro data and strong auto sales figures. However, Nifty failed to hold 15,000 mark at the close.

Markets, this week, will focus on long-term bond yield trends, US Fed policy outcome and macroeconomic data as investors look for cues amid volatility.

As D-Street would open for trade today, investors could react to US President Joe Biden’s $1.9 trillion coronavirus relief package passed in the Democratic-controlled Senate on March 6 while keeping a close watch on the US bond yields.

The yields on US 10-year Treasuries hit a one-year high of 1.625% last Friday in the wake of positive US jobs data and rising inflation, and stood at 1.60% on Monday. A sustained increase in yields does not bode well for emerging such as India and could lead to FII outflows.

Given the spike in yields, the Federal Reserve’s decision in the forthcoming meet on March 16-17 would be crucial to watch out for.

Besides, Street would track the industrial production data for January and CPI inflation for February that will be released on Friday. The foreign exchange reserves for the week ended March 5, will also be released on the same day.

The Covid-19 concerns, that were put on the backburner, have once again flared up with India recording a daily spike in fresh cases, stoking concerns of a second wave. India on Sunday reported 18,711 fresh cases, 100 Covid death in the last 24 hours, according to the latest update by Union Health Ministry.

That apart, investments by FPIs as well as domestic investors, movement of rupee against the US dollar and crude oil prices are likely to be closely watched for cues.

Lastly, another mainboard IPO is slated to open today, showing the excess liquidity in the system. Easy Trip’s Rs 510 crore issue is priced in the band of Rs 186-187 per share and most analysts have a ‘Subscribe’ rating on it.

And now, let’s take a look at the trade setup for today.

Asian stocks rose Monday on optimism over the $1.9 trillion US pandemic relief plan and the global recovery. MSCI’s broadest index of Asia-Pacific shares outside Japan firm 0.4%, Japan’s Nikkei gained 1.2%, while S&P 500 futures rose 0.3%.

Tracking the firm global mood, SGX Nifty was trading 0.94% higher at 15,094, indicating a gap-up start for D-Street. Although, a spike in crude oil and rising bond yields could play spoilsport.

The oil prices were at the highest levels in more than a year after Yemen’s Houthi forces fired drones and missiles at the heart of Saudi Arabia’s oil industry on Sunday, raising concerns about production. Brent climbed $1.09 a barrel to $70.45, while U.S. crude rose $1.08 to $67.17 per barrel.

On the stock-specific front, multiplex major PVR will be in focus after it said it plans to invest Rs 150 crore to open up to 40 screens across the country in the next fiscal.

Adani Power has made a Rs 2,600-crore offer to acquire Essar Power MP under the Insolvency and Bankruptcy Code (IBC) rules, according to media report.

Sayaji Hotels said it has inked agreements for seven new properties across various states, including Gujarat and Rajasthan.

The country’s largest iron ore miner NMDC has left the price of lump ore unchanged at Rs 5,100 per tonne and Rs 4,210 per tonne for fines in its latest price revision announced on Saturday.

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