A look at 7 key factors likely to drive markets in the coming week

Volatility is likely to remain high next week and market participation is likely to be muted. The stock markets will remain shut on March 29 on account of Holi. Markets will also remain closed on April 1 on account of Good Friday.

The domestic barometers dropped for the week ended March 26 as concerns pertaining to recent rise in Covid-19 cases in various parts of the country continued to weigh on investors’ sentiments. Additionally, weak cues from global markets also impacted sentiment.

In the week ended March 26, Sensex dropped 849.74 points or 1.70% to settle at 49,008.50. The Nifty 50 index lost 236.70 points or 1.61% to settle at 14,507.30.

Going by the buzz on Dalal Street, we have collated a list of key factors that are likely to give direction to market in the truncated next week.

Global cues: Trend in global stock markets, the movement of rupee against the dollar and crude oil prices will dictate trend on the bourses in the near term. Investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will be monitored.

US bond yields: The key thing to watch out for in the near future would be the US bond yields because any rise in yields can take out the FII money from developing countries like India to western markets and could also be a risk for emerging markets currencies.

Dollar index: The Dollar Index, which measures the U.S. currency against a basket of six peers, will also be closely watched.

Macro data: India’s infrastructure output data for February will be unveiled on 31 March 2021.

Auto sales: Auto stocks will be in focus as auto companies will start announcing monthly sales numbers for March starting from 1 April 2021.

Covid cases: Updates related to COVID-19 will be closely watched. Also on the radar will be news on Covid vaccine development. From here on the pace of the improvement of economic indicators along with outcomes of a possible vaccine or cure for COVID-19 would determine the movement of the market.

Total COVID-19 confirmed cases worldwide stood at 12,54,92,163 with 27,55,210 deaths. India reported 4,21,066 active cases of COVID-19 infection and 1,60,949 deaths while 1,12,64,637 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Other factors: Overseas, China will announce the Caixin Manufacturing PMI for March on 1 April 2021.

The US Markit Manufacturing PMI for March will be declared on 1 April 2021.

The Euro Area Markit Manufacturing PMI for March will be declared on 1 April 2021.

(With inputs from Capital Market)