There is a lot of economic data coming out. Investors are looking for information on inflation. The Fed decided to start tapering stimulus measures, so people will be looking for the opinion of the Fed on inflation.
There are many companies that will report their earnings during the week. The UK will report growth data and China’s Communist Party will vote to approve a third term for President Xi Jinping.
Top 12 Things to Watch in Markets in the Week Ahead
We will get data about how prices for things people use are changing on Wednesday. One day later, we will get data about prices for goods that producers used to make those goods.
The CPI numbers are expected to increase. They will be higher than they have been before. Economists think that the increase will be 0.6% per month and 5.8% per year and core inflation (which is food and energy) will go up by 4.3%.
The Fed said that high inflation is not likely to last and it will not need to raise interest rates quickly. The central bank has been managing to communicate plans to scale back bond purchases without triggering a taper tantrum. But if inflation rises, it could cause problems.
The head of the Federal Reserve is going to speak at two conferences this week. The first will be an online conference and the second will be a live one. The first one will be about gender and the economy, and the second will be about diversity in economics and central banking.
Other people who work for the Federal Reserve will talk during the week. They are Vice Chair Richard Clarida, New York Fed President John Williams, Fed Governor Michelle Bowman, Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans and San Francisco Fed President Mary Daly.
Earnings are better than expected. The main indexes closed at a new high on Friday. It was because of the strong U.S. jobs report and because Pfizer’s experimental drug had positive data.
There are many companies that will report their earnings this week. These include Walt Disney, AstraZeneca, and BioNTech among others. You can watch them on TV or the internet to see how they did and what is going to happen next.
On Thursday, the UK will release data on third quarter growth. Economists expect GDP to be 1.5%. That is less than last quarter. Investors thought that the Bank of England would be the first major central bank to raise rates. The COVID-19 pandemic caused this to happen.
The BoE said that if the economy does well, it will have to raise rates from 0.1%. The BoE thought it was better to wait for data on the labor market before raising rates.
The leaders of China are going to meet in Beijing from Monday through Thursday. They might decide to give President Xi Jinping a third term.
The meeting is coming when the world’s second largest economy, which is China, is not doing well. They are struggling with many things like having to stop property sales and not having enough energy.
Data on Sunday showed that some of the exports from China were less than what people expected. But imports were less than what people expected. This might mean that domestic demand is not as strong as it should be.
Vaccination and Corona
India has just crossed the 100 crore mark in the number of people vaccinated. The country now has 101.3 crore people vaccinated, and 68.48 lakh COVID-19 vaccine doses have been administered in the last 24 hours. With this, nearly 30% of total people who have been vaccinated with the COVID-19 vaccine have completed their both doses.
The country managed to limit the number of cases of COVID-19 to below 20,000 for more than two weeks, with there being less new cases and more people getting better. The government eased restrictions across the country and experts think that this has helped economic growth.
But the street will continue to see the COVID-19 numbers. It has been going down in many countries, but it is going up in others. Countries including the United Kingdom, Russia, Germany, Poland, Netherlands and Chile have seen a rise in cases.
Foreign Investors and Domestic Investors took profit off the table last week. This was because there is a lot of pressure to pay back loans. But experts feel like this is not a cause for panic in the market.
Foreign and domestic investors have sold Rs 10,000 crore worth of shares. The mood of the investors will be watched next week.
Indian Rupee, US Dollar Index and Bond Yields
The Indian rupee doesn’t change much. Oil prices are rising, but the stock market is weak. The US dollar index falls because people are worried about inflation and interest rates in the US. People think that next week, the Indian rupee will stay where it is and the US dollar index will get support at lower levels.
The US bond rates went up to 1.7%. They were at 1.57% last week. The US might start tapering its stimulus measures in December or November 2021. Most experts think that the US Fed could start tapering in November or December 2021 and the rising US bond rates will spoil the global equity markets moods. The Fed will hold their next meeting on Nov 5th, 6th, 7th 2020 to decide what they are going to do about this issue.
The price of oil went up this week. It reached a new high of $86.10 before settling at $85.53 because there is not enough oil and the price of coal and gas are going up because they are running out, which makes people want to use more oil for energy.
The rising price of oil is a problem for India, which is not making its own oil. This means people will pay attention to the price in the future.
Next week there will be two IPOs. They are Nykaa and Fino Payments Bank. A company called Falguni Nayar-promoted FSN E-Commerce Ventures, which runs the company Nykaa and Nykaa Fashion platforms, is opening its Rs 5,351.92 crore public issue on October 28th and it will close the subscription on November 1st.
This offer will give you Rs. 630 crore and it will sell over 4.19 crore shares at a price of Rs 1,085-1,125 per share.
Fino Paytech is opening up their bank Fino Payments Bank to the public next week. You can buy it now if you want. Every detail has not been announced yet.
Experts think that the long-term trend for the market will be positive. They say that the 50 stocks should work well, but they have a bearish candle on October 22 and during the week.
The global stock market is unpredictable, so the Indian stock market also changes. Investors are making money now, but in the future it might change. The Nifty (a list of stocks) has a bearish candle (a type of chart), which means that it could be weaker for a while. But right now, there’s still a good chance to make money long-term.
Some people feel that the 20-day SMA, or 17950, is the key support level. Other people think that 18300 and 18425 will act as decisive resistance levels. For day traders, 18050 is the sacrosanct support level and above it a pullback rally could be seen up to 18300-18350 levels. If you break down 18050 then there could be one more leg of correction up to 17000-17975.
Bank Nifty had a good week, and it was the only thing to go up. It went up by 2.5%. Experts think that it can go up even more to 41,000 in the near future.
For Bank Nifty, 40,500 is a place where we might see people selling their shares. But if they keep going up past this point then they will keep going to 41,000-41,500 levels. If they go down to 39,300 then the next support is at 38,800-38,500.
F&O Expiry Week
The markets for September will stop on October 28. This could cause the market to be jumpy next week because people will close their positions and start new ones in November.
Option data has shown that the Nifty50 will go to 18,000 or 18,500 in the next few days. On Monday, it was 18,200 on Tuesday and Wednesday it went down to 18,050.
Maximum call open interest was at 18,200. This means that there are more people who want to buy than sell calls. Maximum put open interest was at 17,500. This means that there are more people who want to buy than sell puts.
Maximum writing was seen at 18300, then 18200 & 1800 strikes with unwinding at 17700 & 18900 strikes. Put Writing was seen at 17500 then 18000 and 1800 strikes.
ICICI Direct said that when the index is higher the 18000 Call strike has been a level of support. This is because it’s been at a high base and has moved above this sharp up move to 18600. In coming sessions, if the index breaks these levels it may push it down to 17,600.
The volatility index has suggested that the market is dangerous. It also said that it is possible for people to sell their shares after they have done well.
India VIX is a measure of how volatile the market is. It increased by 11.29% from last week.
Conclusions Of Top 12 Things to Watch in Markets in the Week Ahead
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