Share market expectations: 10 things you need to know before opening bell

The Indian benchmark equity indices - Sensex and Nifty - ended 1 per cent lower each on Friday led by selling pressure in auto and banking stocks amid negative global equities. The BSE Sensex settled 433 points lower at 37,877 and Nifty fell 122 points to end at 11,178. During the week ended August 14, Sensex and Nifty settled in negative terrain, falling by 163 points and 35 points, respectively. Six of the 10 most valued domestic firms together lost Rs 78,275 crore in market valuation last week, pulled down largely by heavyweights Reliance Industries Limited (RIL) and Tata Consultancy Services (TCS). RIL, TCS, HDFC Bank, Hindustan Unilever Limited (HUL), Bharti Airtel, and Kotak Mahindra Bank suffered erosion in their market capitalisation (m-cap) during the week. However, Infosys, HDFC, ITC, and ICICI Bank finished with gains.

Going ahead, the market may see some correction amid uncertain environment in wake of rising coronavirus cases. With earnings announcement by index heavyweights are already out, investors will keep an eye on US-China tensions and coronavirus cases which will set tone for the markets. Development in global markets will also be watched closely by the traders.

Also Read: Sensex ends 433 points lower, Nifty at 11,178; auto, banking stocks lead losses

"The week ahead for the global markets will be shaped by the outcome of US-China meeting, and with Indian markets increasingly in sync with global cues, this could have an impact on the opening days of the week. Any indication of another stimulus package by the government will benefit the markets. Focus will remain on earnings visibility and with liquidity remaining high, any corrections may be bought into. However, we advice to be in an accumulation mode and focus on quality stocks," said Vinod Nair, Head of Research at Geojit Financial Services.

"Going ahead market participants will closely track the development related to Covid vaccine, the rising infection of coronavirus, development on economic activities, corporate earnings and US-China relationship," said Sumeet Bagadia, Executive Director, Choice Broking.

Also Read: Six of top-10 firms lose Rs 78,275 crore in m-cap; RIL, TCS hit hard

Here's what you need to know before share market opens on August 17.

Earnings announcement  

Market is likely to witness stock specific movement this week as more than 200 companies are set to announce their quarterly earnings. The list mostly includes midcap and smallcap stocks. Among the important companies whose results will be eyed include Punjab National Bank, Zee Entertainment Enterprises, CSB Bank, Union Bank of India, Muthoot Finance, Oil India, Ruchi Soya Industries, Indian Overseas Bank, Rossari Biotech.

Global cues

Traders will also keep a track on US-China trade tension and development on another stimulus package in the US which is likely to impact market sentiment. There is hope for another round of stimulus in the US even though the debates over financial package between Republican and Democratic remained inconclusive so far.

Rising COVID-19 cases

Coronavirus cases are constantly rising in the country which is forcing economies to reconsider restrictions to contain the spread. India's COVID-19 tally increased to 25,89,682 with a single-day spike of 63,490 cases, while the total number of recoveries rose to 18,62,258 pushing the recovery rate to 71.91 per cent on Sunday, as per the Union Health Ministry data. The death toll due to coronavirus infection climbed to 49,980 with 944 people succumbing to the disease in a span of 24 hours, the data updated at 8 am showed. India has been reporting over 60,000 cases daily since August 7, barring August 11 when the country registered 53,601 new instances of the infection.

Also Read: Coronavirus update: India registers 63,490 fresh cases, recovery rate at 71.91%

Macro data

The minutes of the RBI Monetary Policy Committee held between August 4-6 are slated to be released on August 20, while foreign exchange reserves data will be out on August 21.

Globally, US will release FOMC Minutes on August 19 followed by Initial Jobless Claims on August 20 and fMarkit Manufacturing PMI Flash and Existing Home Sales on August 21.

Infrastructure and optical fiber related stocks to remain in focus

Shares of infrastructure and optical fiber network related companies will see some movement this week after Prime Minister Narendra Modi in his 74th Independence Day speech announced that the project to connect India's over six lakh villages with optical fibre network will be completed in the next 1,000 days.

US-China trade deal

The proposed US-China Phase 1 trade deal initially slated for Saturday had been delayed due to scheduling conflicts and the need to allow time for more Chinese purchases of U.S. exports, Reuters quoted sources as saying. The US President Donald Trump has said on Friday that the trade deal was "doing very well," but did not comment on the delayed meeting.

Hearing of AGR case in Supreme Court

Shares of telecom companies, Vodafone Idea and Airtel, will remain in focus as the Supreme Court will hear the issue of adjusted gross revenue (AGR) dues on Monday. The three-Judge bench of Supreme Court, which is hearing the case, is expected to verify the spectrum sharing deal signed between Mukesh Ambani-controlled Reliance Jio Infocomm (RJIL) and his younger brother Anil Ambani's bankrupt telecom company, Reliance Communications (RCom) on Monday.

Tata Group's failed talks with UK govt for financial support

Shares of Tata Group companies, especially Tata Motors and Tata Steel, will be keenly watched after these companies failed to secure a bailout package from the UK government. As per report, the Indian multinational business group may look for a strategic partner for Jaguar Land Rover (JLR) and to sell its British steel operations. The deal between the UK's Treasury and the Tata Group companies fell apart after the government concluded that the Indian firms were sufficiently financed and didn't qualify for taxpayer support, as per Bloomberg's report. The news report also added that stringent conditions imposed on lending, including decarbonisation requirements pushing electric vehicles, made the deal infeasible for the companies owned by Indian conglomerate Tata Group.

FIIs and DIIs flow

Flow of funds by foreign institutional investors (FIIs) and Domestic institutional investors (DIIs) will set the tone for the market. It has been observed that FIIs continued to support the Indian equities even when there is consistent outflow by DIIs.

Stock specific movement

Shares of HDFC Bank will remain in focus after the company announced its June quarter earnings on Saturday. The lender reported 19.6 per cent rise in its standalone net profit at Rs 6,658.62 crore for April-June 2020; while its income rose to Rs 34,453.28 crore during the quarter.