Sunday, July 17, 2016

THE WEEK AHEAD

Next batch of Q1 results of India Inc to decide trend


Macroeconomic data, next batch of Q1 results of India Inc., progress of monsoon rains, proceedings of the monsoon session of Parliament, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in the near term.

Investors will closely watch the ongoing Q1 results of India Inc. Shares of Reliance Industries (RIL) will on Monday, 18 July 2016, react to Q1 results. The results of RIL are slated to be announced after market hours on Friday, 15 July 2016. Hindustan Unilever announces Q1 results on Monday, 18 July 2016. UltraTech Cement and Wipro will announce Q1 results on Tuesday, 19 July 2016. Axis Bank, Cairn India, HDFC Bank, and Kotak Mahindra Bank will announce Q1 results on Thursday, 21 July 2016. Axis Bank is scheduled to announce its Q1 result on Friday, 22 July 2016. The result season started from the second week of July 2016 and is slated to end during the second week of August.

Investors will also track the progress of monsoon rains. The India Meteorological Department (IMD) reportedly said that Monsoon has covered the entire country, two days before its normal date of 15 July. For the country as a whole, monsoon rains till 6 July 2016 was 1% above long period average. IMD had predicted above normal rains this monsoon season. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture. Around 70% of the country's farmlands are rain-fed.

Shares of public sector oil marketing companies (PSU OMCs) will on Monday, 18 July 2016, react to a regular fuel price revision due during this weekend. PSU OMCs review fuel prices twice a month based on the trend in international oil market and currency movement. The first review takes place during the middle of the month and the last review at the month-end.

Meanwhile, investors are hopeful about passage of key bills including Goods & Services Tax (GST) Bill during the monsoon session of Parliament, with proceedings slated to begin from next week. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The monsoon session of Parliament will begin from 18 July 2016 and concludes on 12 August 2016.

On the global front, meeting of Governing Council of European Central Bank (ECB) on monetary policy will be held in Frankfurt on Thursday, 21 July 2016, which will be followed by the press conference.

Data on Nikkei flash Japan Manufacturing Purchasing Managers' Index (PMI), indicating health of business activity there for the moth of July will be out on Friday, 22 July 2016. Markit flash Composite PMIs for Germany, France and the Eurozone for July will also be released on the same day.

In US, data on housing starts for June, reflecting the commitment of builders to new construction activity in that month will be out on Tuesday, 19 July 2016. Data on existing home sales for June, tallying the number of previously constructed homes, condominiums and co-ops in which a sale closed during that month will be released on Thursday, 21 July 2016. Markit flash PMI index for the month of July will be released on Friday, 22 July 2016.

No comments: