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F&O expiry, monsoon progress and OPEC outcome among top factors that will steer market this week


NEW DELHI: Investors witnessed another volatile week during June 18 – 22, with the bears and the bulls showing equal prowess to dominate Dalal Street.

However, the latter emerged victorious, thanks to brisk buying in financials and pharma counters. The S&P BSE Sensex advanced 67.50 points, or 0.18 per cent, to end the week at 35,689 while the 50-share Nifty pack gained just 4 points, or 0.03 per cent, to settle at 10,821.

A rush was seen in the primary market as two issues — RITES and Fine Organic — received strong response from investors.

Bajaj Finance on Friday surpassed Axis Bank in market value for the first time. This made Bajaj Finance the sixth most valuable company in the banking, financial services and insurance (BFSI) sector in India.

This apart, trade war concerns and a falling rupee were the major headwinds that restrained the market from coming out of range. Going ahead, updates on monsoon, F&O expiry and geopolitical developments are likely to keep investors on the edge.

Here's a look at the key events/developments that investors need to look at before taking any fresh positions in the market:

All eyes on Rain God
Southwest monsoon made an entry into Gujarat on Saturday with the districts of Valsad, Navsari, Surat and Dangs in south Gujarat region receiving heavy to moderate rainfall. Monsoon rains are set to hit Bihar in next two to three days, according to the Met Department official. It has already been delayed by nearly two weeks. According to an ET report dated June 22, rainfall recorded in the country in the first three weeks has been 9 per cent below normal as the weather system lost steam after pounding Mumbai and Karnataka with torrential rain 10 days ago.

The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.

OPEC meet outcome
On Friday, OPEC and allies, including Russia, agreed to pump more oil from next month, offering relief to consumers after Saudi Arabia secured a last-minute deal to overcome Irans opposition. Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day (bpd), or 1 per cent of global supply. Iraq said the real increase would be around 770,000 bpd because several countries that had suffered production declines would struggle to reach full quotas, Reuters reported.

F&O expiry ahead
Trading is expected to turn volatile next week as traders will roll over positions in the F&O (futures & options) segment from the near month June series to July series. June F&O contracts will expire on Thursday, June 28.

Trade war fears
Trade tensions are spreading fast. After China and some of American trading partners, the next group on US President Donald Trump's radar is the European Union. US Trump on Friday threatened to impose a 20 per cent tariff on all imports of EU-assembled cars, a month after his administration launched an investigation into whether auto imports posed a national security threat. Reacting to it, the European Union said it will respond to any US move to raise tariffs on cars made in the bloc, Reuters reported.

Tech charts have mixed signals
The Nifty50 index on Friday formed a 'Bullish Engulfing' pattern on the daily chart, but an indecisive pattern on the weekly chart suggested that some more upside is needed to instil confidence before the bulls emerge on top. In case, the index holds above the resistance area of 10,830 – 10,850, the rise can continue till 10,929, which is the next major hurdle. On its way down, the 10,738 – 10,685 range shall act as crucial supports for the Nifty, says Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas. "Overall, the short term chart structure of the index is bearish and we continue to maintain our bearish outlook on the index for the short-term with a reversal placed at 10,930," Ratnaparkhi says.

Varroc Engineering IPO
Aurangabad-based auto component maker Varroc Engineering will launch its Rs 1,955 crore initial public offer that opens on June 26 at a price band of Rs 965-967. The offer consists of an offer-for-sale to the tune of 20,221,730 equity shares by promoters and existing investors. Varroc is a global automotive component manufacturer and supplier of exterior lighting systems, power-trains, electrical and electronics, body and chassis parts to passenger car and motorcycle segments worldwide.

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