As we enter a new trading week, the Indian stock market continues to show resilience and strength. The Nifty 50 recently breached the psychological 25,000 mark, setting new records and instilling confidence in investors. While intermittent consolidation is possible, experts believe the overall sentiment remains positive. Let’s explore the crucial factors that could influence market movements in the days ahead.
Market Performance Recap
The week ending August 30 saw benchmark indices and broader markets reaching fresh all-time closing highs. The BSE Sensex surged 1.58% (1,280 points) to 82,366, while the Nifty 50 climbed 1.66% (413 points) to 25,236. Midcap and Smallcap indices also posted gains of 1.25% and 1.19%, respectively.
Key Factors to Monitor
1. US Economic Data
Investors will closely watch several important US economic indicators, including:
- August unemployment rate and non-farm payrolls
- Monthly vehicle sales
- Weekly jobless claims
- JOLTs job openings and quits
- Factory orders for July
These data points could provide insights into the US economy’s health and potentially influence the Federal Reserve’s decision-making in its upcoming September policy meeting.
2. Global PMI Numbers
Manufacturing and services Purchasing Managers’ Index (PMI) data from various developed and developing nations will be released. Additionally, the third estimates for Europe’s Q2 GDP will be announced, offering a broader picture of global economic trends.
3. Domestic Economic Indicators
On the home front, market participants should keep an eye on:
- Final HSBC Manufacturing PMI (September 2)
- Services PMI (September 4)
- Bank loan and deposit growth (September 6)
- Foreign exchange reserves data (September 6)
4. Auto Sales Figures
Automobile stocks may see movement as companies begin releasing their August sales numbers from September 1 onwards.
5. Foreign and Domestic Institutional Investor Activity
The flow of funds from Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) will be crucial to watch. Last week saw FIIs turn net buyers in the equity cash segment, while DIIs continued their buying streak, albeit at a slower pace.
6. Primary Market Activity
The IPO market will see some action with Gala Precision Engineering’s mainboard issue opening on September 2. Several SME segment IPOs are also lined up, including Jeyyam Global Foods, Mach Conferences and Events, and Namo eWaste Management.
7. New Listings
Investors can look forward to new listings, including Premier Energies (September 3) and Ecos India Mobility & Hospitality (September 4) in the mainboard segment. The SME segment will see listings like Indian Phosphate, Vdeal System, and Jay Bee Laminations.
8. Technical Outlook
The Nifty 50’s chart patterns and momentum indicators suggest a continued upward trajectory. The immediate target range is 25,400-25,500, with strong support at 25,000 and a crucial support level at 24,800.
9. F&O Cues
Options data indicates 25,700-25,800 as the next levels to watch on the upside, with 25,000 acting as a support level. Maximum call open interest is seen at the 26,000 strike, while the 25,000 strike holds the highest put open interest.
10. Volatility Index
The India VIX, often referred to as the fear index, has remained low for three consecutive weeks. As long as it stays below 15, market sentiment is likely to remain bullish.
Expert Opinion
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, expects the market to maintain its upward trajectory with stock-specific action. He emphasizes that global macroeconomic data released during the week will continue to provide important cues for domestic equities.
As we navigate through these factors, investors should remain vigilant and adaptable to potential market shifts. While the overall outlook appears positive, it’s crucial to approach investments with a well-informed and balanced strategy.
