Indian stock markets touched an all-time high last week- thanks to positive news on front of vaccination, positive cues from the global markets that led to a sharp rally in Indian market. The Indian benchmark indices, BSE Sensex and Nifty50 both ended in green on Friday, beating the initial volatility. The S&P BSE Sensex was up 176 points, or 0.31 per cent at 56,124.72 while the Nifty50 was up 68 points, 0.41 per cent at 16,705.20. The 30-share BSE Sensex touched a high of 56,188.23 and a low of 55,675.87 to finally settle at 56,124.72 for the first time. India’s volatility gauge also cooled off and was down 1 per cent from 13.54 to 13.34 level.
“Nifty continues to hit new milestones. Post previous weeks volatility, Nifty started the week on a positive note as the global markets recovered which led to some positive sentiment. Market participants looked a bit perplexed on Monday, but the broader markets saw buying interest on Tuesday which led to an up move in the index to march towards new highs again. In next couple of sessions, Nifty consolidated within a range till expiry and it again resumed the momentum on the last day to end the week above 16700,” Ruchit Jain, senior analyst – technical and derivatives, Angel Broking said.
“But, this index is still in a consolidation phase and has not breached its important supports. Hence, there’s a good probability of some buying interest emerging in this sector which would then lead to further support to the benchmark. The immediate supports for Nifty are placed around 16600 and 16500 while the levels to watch on upside will be 16800 and then 17000 mark,” Jain said.
Covid-19 in India
The surge in Covid-19 infection in India is a big concern as of now. The uncertainty emanating from the surge in Covid-19 infection could impact the market next week. As India recorded 46,759 fresh Covid-19 infection on August 28, which is highest in last 55 days. The southern state of Kerala has reported 32,801 cases in the past 24 hours and it has been reporting over 30,000 cases for three days now. This is one of the crucial number that the markets would be keeping a close watch on.
Macro-Economic Data
In the upcoming week, the GDP numbers will play a pivotal role in deciding the course of the markets. The GDP numbers are expected to be a double digit number. Recently, the State Bank of India (SBI) had pegged India’s GDP to grow at 18.5 per cent in the June quarter on low base effect. The markets next week would be looking up to the GDP data that is scheduled to come on August 31. Apart from GDP, Manufacturing PMI, Balance of Trade Payment data, Infrastructure Output data, Manufacturing Composite PMI data are other macroeconomic data that markets would be looking up to.
Earnings
Major companies like Hindustan Aeronautical, IL&FS Engineering And Construction, Focus Industrial Resources, Rollatainers Ltd, Newtime Infrastructure Ltd, and SDC Tech Media are going to release their earnings for the first quarter of 2021-2022.
US Fed Powell’s Speech and Jackson Hole Symposium
The last one week, Indian markets was seeking clarity about the tapering of stimulus from the US economy from Jerome Powell speech at Jackson Hole Symposium. As the event concluded on Friday this week, US Fed Chief Jerome Powell said at the symposium that the time is right for the Fed to start tapering off some of its economic support. Although he did not mention the exact timeline for the tapering to begin. “A hawkish Fed may rattle markets. On the other hand if the Fed reiterates its ‘transient inflation’ theory and continues with QE till early 2022, markets will remain resilient. So, FPI response will depend on the Fed speak. Any way, they are unlikely to commit big fresh money at these stretched valuations,” Dr V.K Vijaykumar, chief investment strategist at Geojit Financial Services.
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