Mumbai: After a week that witnessed a stellar rally, led by the strong gains in index heavyweight Reliance Industries which declared a net debt-free status earlier than expected, the market is now likely to focus on rising local Covid infections and border tension between India and China.

The week may see volatile moves and monthly futures & options (F&O) contracts expire on Thursday while the last leg of March quarter earnings will also trigger stock-specific movements.

Here are a few key factors that may guide stock markets next week:

Indo-China developments: Investors will keep a close watch on political and border developments between the two nuclear-armed nations. Last week, India and China engaged in a deadly clash — the worst in 45 years. Fighting in the Ladakh region on Monday killed at least 20 Indian soldiers and injured more than 70. China has not released any casualty figures for its troops.

Rise in coronavirus infections In India: India reported a record jump in coronavirus infections on Saturday. It saw an increase of 14,516 Covid-19 cases, the health ministry said, taking the total to 395,047 with 12,948 deaths reported. India has the world’s fourth highest number of Covid-19 infections, and is just behind the United States, Brazil and Russia.

Second wave of Covid-19 infections across the globe: Countries such as Chins and Iran and grappling with a second wave of the deadly coronavirus infections. This is fuelling fears that the virus is here to stay for long. China’s second outbreak is centred in the capital Beijing, with at least 184 new cases reported since last week, as authorities banned outbound travel and imposed a partial lockdown.

Expiry on monthly derivatives contracts: The coming week is expected to be a volatile one for local equity markets on account of F&O expiry, which is scheduled to take place on June 25.

Last leg of Q4 results: Companies such as Info Edge (India), Asian Paints, Bank of Baroda, Berger Paints, GAIL (India), India Cements, Indian Oil Corporation, Ashok Leyland are scheduled to announce their March quarter earnings next week.

Domestic data: The investors will keep a close watch on the data of foreign exchange reserves, scheduled to be released on June 26. Foreign exchange reserves in the country rose to $501.70 billion on June 5 from $493.48 billion in the week before.

Global macroeconomic data: On the global front, investors will be eyeing macro-economic reports from world’s largest economy, United States existing home sales on June 22 followed by Redbook, Markit Manufacturing PMI Flash, new home sales on June 23, House Price Index on June 24, GDP growth rate, goods trade balance, jobless claims and, Fed stress test results for big banks is expected on June 25.



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