Macro data, earnings, virus updates to drive markets: Analysts

Earnings season and the management commentaries so far suggest more volatility and disruption in earnings ahead. In the near-term, we expect the market direction to depend upon the spread and intensity of COVID cases, development around COVID vaccine and incremental government/ regulatory actions to restart the economy, analysts said.

New Delhi: Trading in the equity markets this week would be guided by several macroeconomic data announcements, quarterly earnings and updates about the COVID-19 pandemic, analysts said.

Participants will also track global cues amid US-China trade deal negotiations, they added.

"Earnings season and the management commentaries so far suggest more volatility and disruption in earnings ahead. In the near-term, we expect the market direction to depend upon the spread and intensity of COVID cases, development around COVID vaccine and incremental government/ regulatory actions to restart the economy."

"Investors would also track the developments around the trade tensions between US and China," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said.

The number of COVID-19 cases in India has neared the 60,000-mark, with around 2,000 fatalities. Globally, the coronavirus cases have topped 3.9 million and caused more than 271,000 deaths.

Ajit Mishra, VP - Research, Religare Broking Ltd, said, "Needless to say, domestic factors viz. COVID-19 cases and disappointing earnings will continue to weigh on the sentiments ahead."

On the macroeconomic front, industrial production, consumer inflation and WPI inflation data will be announced this week, which will influence trading in the equity market.

Meanwhile, the government on Friday increased its market borrowing programme for the current financial year by more than 50 per cent to Rs 12 lakh crore. According to experts, this might push the fiscal deficit to about 5.5 per cent of GDP, from the target of 3.5 per cent in FY21.

Investors would also track moves by various countries to ease lockdowns and resume economic activities.

"While the earnings season has been lacklustre, markets seem to be awaiting announcement of a stimulus package from the government," said Vinod Nair, Head of Research at Geojit Financial Services.

During the last week, the Sensex plunged 2,074.92 points or 6.15 per cent.

Major corporates scheduled to announce their earnings this week include Bandhan Bank, Nestle India Limited, Kotak Mahindra Bank and Maruti Suzuki India.

Meanwhile, ICICI Bank on Saturday reported a 26 per cent rise in standalone net profit at Rs 1,221 crore for the March quarter.

Markets would also track movement in crude oil and rupee-US dollar trend, analysts said.

(PTI Report)