Weak global signals, expectations of a hawkish Fed and profit booking kept investors on their toes. Additionally, the absence of major directional cues also helped volatility gain the upper hand.
From a sector perspective, IT came out on top, followed by pharma. However, state-run lenders stole the show, followed by media and energy stocks.
Nifty is taking a breather from a phenomenal surge and is currently trading in a narrow range of 17,300-17,800. It would be critical to see how our markets react to the fall in the US on Monday, said Ajit Mishra, Vice President – Research, Brokerage.
“We reiterate our view to focus more on risk management during this corrective phase and suggest pursuing an equity-specific trading approach until the Nifty resumes trend,” he added.
Below are the seven key factors that could guide the markets this week:
Jackson Hole Symposium
Speaking in Jackson Hole, Wyoming, US Federal Reserve Chairman Jerome Powell made it clear that the central bank aims to control inflation rather than growth and is willing to keep the interest rate high to fight against rising prices.
His stiff and hawkish rhetoric sent U.S. indices down as much as 4% on Friday and Indian markets could also feel the wrath of the steep fall. Indian markets will react to his comment on Monday.
India’s GDP figures
India will release its GDP figures for the June quarter of 2022 next week on Wednesday. India’s economy likely grew by 15.1% in the first quarter of FY23, helped by a favorable base and a resumption of services as all Covid restrictions were removed, according to a Reuters poll.
Leading the GDP figures, India is expected to grow by 7.4% in the current financial year (FY 2022-23) and continue at the same level in the next financial year as well, the finance minister predicted on Friday. of the Union, Nirmala Sitharaman.
Reliance Industries AGM
Reliance Industries, India’s largest listed company, will hold its 44th Annual General Meeting (AGM) on August 29 on Monday and Dalal Street would be eagerly awaiting what Mukesh Ambani would reveal to investors.
The market awaits an update on the company’s success plan, 5G rollout and future roadmap for the renewable energy sector. However, any updates on the spin-off or IPOs of the retail and telecommunications businesses are unlikely, as ET Now reports.
Automotive sales figures
The markets are reacting well to the automakers’ sales figures for the month of August. The first month of the second half of the current year has been mixed for automakers, as markets hoped for a recovery ahead of the holiday season.
In July, sales of two-wheelers increased slightly, while passenger vehicles and commercial vehicles saw solid growth. However, improving inventories and new launches will help auto sales figures after a lackluster monsoon season.
Indian equity markets continue to see foreign inflows amid rising bond yields and a strengthening dollar as REITs ended an eight-month streak of losses and dumped more than Rs 45,000 crore on national stock markets.
REITs are now buying stocks of financials, capital goods, consumer staples and telecommunications. REITs are buying in India as the dollar strengthens, reflecting their confidence in the Indian economy, said VK Vijayakumar, chief investment strategist at
“The Fed’s ultra-hawkish stance at Jackson Hole is short-term negative for equity markets. This could impact REIT flows in the near term,” he added.
US Unemployment Insurance Claims
Initial unemployment insurance claims measure the number of people who filed for unemployment insurance for the first time in the past week. This data would be closely watched to track the strength of the world’s largest economy.
The Nifty50 index closed on a negative note following the formation of a bearish evening star candlestick on a weekly time frame. The short-term trend is still bullish, but at the same time the market remains high relative to average, so the upside should be limited, said Apurva Sheth, head of market outlook, Samco Securities.
“We believe the levels around 17,400 on the Nifty are likely to serve as game-changing levels. A break below this level may result in a retest of the 17,100 level. bullish,” he added.
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