Markets week ahead: US stimulus, AGR verdict, Q1 earnings will guide markets

India’s benchmark indices head to a new week looking for cues in updates on a fresh US stimulus, outcome of US-China trade talks and, back home, the Supreme Court verdict on AGR dues and the state of coronavirus infections.
April-June quarter earnings from midcap and smallcap companies may also trigger stock-specific movement in a market which has already been seeing a shift in action to the broader market.

Benchmark equity indices Sensex and Nifty declined last week, hurt by worse-than-expected Chinese macro data, falling European markets, lacklustre macroeconomic data and concerns over rising coronavirus cases in India.
Frontline indices Sensex and Nifty dropped 0.43% and 0.32% respectively. However, the interest in mid and small cap stocks rose, with BSE mid and small cap indices logging 2.56% and 1.98% gains, respectively.

Meanwhile, the Covid-19 pandemic crossed another grim milestone as India reported 63,489 new coronavirus cases, taking the total tally at 25.89 lakh. The death toll from the virus went past 50,000 on Saturday. Over 13,500 deaths have been reported from across the country so far this month. By contrast, the whole of July saw a total of 19,122 fatalities.

The next Supreme Court hearing of the adjusted gross revenues (AGR) case for telcos is scheduled for August 17. The apex court, in its hearing on August 14, directed telcos under insolvency to submit details of spectrum sharing agreements that they have entered into. The court has also asked for the spectrum sharing agreement between Reliance Communications and Reliance Jio to be placed on record.

Investors will also watch out for the foreign exchange reserves data slated to be released on August 21. Foreign exchange reserves in India increased to $534570 million in July 31 from $522630 million in the previous week.
On the global front, investors will be eyeing macro-economic reports from the world’s largest economy, United States, starting with Foreign Bond Investment, Overall Net Capital Flows on August 17 followed by Redbook on August 18, FOMC Minutes on August 19, Philadelphia Fed Manufacturing Index, Initial Jobless Claims on August 20 and finally Markit Manufacturing PMI Flash, Existing Home Sales andBaker Hughes Total Rig Count on August 21.
FII were net buyers in the equity segment last week, with gross purchases of Rs 41,926.41 crore and gross sales of Rs 23,620.90 crore, leading to a net inflow of Rs 18,305.51 crore.

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