5 factors that can steer market in a holiday-truncated week

Benchmark equity indices made a smart comeback last week as tensions over US-China trade war and a likely crude output disruption post Iran sanctions eased and the rupee rebounded to below the 73 level.Sensex surged 1,662.34 points or 5 per cent for the week to 35,011.65 while the NSE barometer Nity50 soared 523 points, or 5 per cent, to 10,553.

Here are five key developments one should watch out for the upcoming truncated trading week: 

Iran sanctions impact
US sanctions on Iran, a major oil producer, will come into effect from Sunday, November 4. What may ease investor concerns in India is that the country is among eight that have been granted exemptions by the US to import oil from the sanction-hit country. But to enjoy this exemption, India needs to cut purchases.

That seems not a problem for now as Saudi Arabia, a major Opec partner, has committed to meeting India’s rising oil demand.

While Iran sanctions may not have impact on crude output for now, even the possibility of a supply shortage may push crude prices higher. For domestic investors, it will be the foremost monitorable for the week.

US mid-term poll
The mid-term elections in US scheduled for Tuesday (November 6) will be crucial, given the harsh posture Donald Trump administration has adopted in handling of its foreign affairs, from sanctions to trade wars.

Special mahurat trading
Wednesday will see once-a-year auspicious ‘Muhurat’ trading. The trading, will be conducted on Diwali (also the beginning of new Hindu calendar Samvat 2075). As per schedule, the special will be conducted between 5 pm and 6.30 pm.

In 2017, the muhurat trading was conducted for an hour between 6.30 and 7.30 pm. In 2016, it was conducted between 6 pm and 7 pm.

History suggests the BSE Sensex has generally remained flat with a positive bias in muhurat trading every year.The biggest exception to this was October 28, 2008, when the index surprised many by soaring 5.86 per cent to settle at 9,008. Data suggests that the 30-pack index has closed in the positive in muhurat trading on 10 out of 12 occasions since 2005.

Fed Reserve policy meet
The next week will see US Federal Reserve holding its two-day policy review starting Wednesday. It is largely believed that US policymakers will remain status quo on the policy rate at 2-2.25 per cent after hiking the policy rate seven times in the last eight quarters. It is also unlikely that the Fed will change its forecasts on the economy. That said strong jobs data in the US on Friday has raised chances of another rate hike in December meet. Thus, Fed commentary would be keenly followed.

Earnings season at peak
Do you know how many BSE-listed companies announced their quarterly results this weekend? Well, it was 185. Yes, 185 on Saturday, a market holiday. With most largecap companies announcing their September quarter results in October, the coming week is all set to see focus shifting towards quarterly results midcap and smallcap companies. But given the week is holiday-truncated, there will be lesser number of companies scheduled to report results than usual – 351 as per BSE data. Big names such as Cipla, GAIL, Fortis HealthcareNSE -1.60 %, PNB Housing, Power Grid will report Q2 numbers on Monday, Aditya Birla Capital, Graphite India, Dr Lal PathLabs on Tuesday, MRF on Thursday and Titan Company, Indian Bank, India CementsNSE 3.43 %, among others on Friday.

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