Q2 earnings, IPO listings, updates on US stimulus among top 10 factors guiding market this week

After a stellar performance last week which propelled investors’ wealth to an all-time high, the Indian equity market is now staring at an earnings-heavy week, as a slew of companies, IT majors in particular, unveil their September quarter report cards, and may provide a glimpse on what to expect in the current quarter and fiscal year.

Listings of Mazagon Dock Shipbuilders and UTI Asset Management Company (AMC) on Monday, may set the tone for the primary market going ahead.
Investors will also closely look out for updates on a second round of US stimulus, and also keenly await the Supreme Court verdict in the loan moratorium case.
Key IT majors such as Infosys, Wipro, HCL Technologies and Mindtree are due to announce their June quarter earnings in the week. The guidance ahead will be keenly watched. Hopes of a decent set of numbers have taken the centerstage after forecast-beating earnings by sector leader Tata Consultancy Services (TCS) last week.

While US President Donald Trump abruptly halted talks over a coronavirus relief bill on Tuesday, negotiations between the White House and Democratic congressional leaders have resumed. US House of Representatives Speaker Nancy Pelosi on Saturday said a new $1.8 trillion economic stimulus proposal from the Trump administration “amounted to one step forward, two steps back” and would need changes to get support from congressional Democrats.
Last week, Principal Economic Adviser Sanjeev Sanyal said the government recognises the need for further stimulus at an appropriate time to perk up demand in the Indian economy. Sanyal’s views followed Finance Minister Nirmala Sitharaman’s comments last week that the government may offer a second stimulus package.

Mazagon Dock Shipbuilders and UTI AMC are set to make their debut on the bourses on Monday. The grey market activity suggests a robust debut of PSU ‘Miniratna’ Mazagon Dock shares on Monday, while mutual fund firm UTI AMC may open flat to marginally lower from the issue price.

The Supreme Court is scheduled to hear the crucial loan moratorium case on October 13. In an affidavit, the Reserve Bank of India (RBI) said that it is not possible to give more relief to sectors affected by the coronavirus pandemic. The central bank said it is also not possible to extend the moratorium period beyond six months.
Market participants will closely watch the data of Index of Industrial Production (IIP) and Consumer Price Index (CPI), which is scheduled to be released on October 12. On October 14, the government will detail Wholesale Price Index (WPI) data for the month of September. India’s WPI increased 0.16 percent from a year earlier in August, after a 0.58 percent fall in the previous month.

On the global front, investors will be eyeing macro-economic reports from the world’s largest economy, United States, starting with core inflation rate, inflation rate on October 13 followed by PPI, Redbook on October 14, initial jobless claims, import & export prices on October 15, retail sales, industrial production, Michigan inflation expectations and Baker Hughes total rig count on October 16.

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