Key developments that will drive the markets this week

Let us look at the key developments this week.

Aug 23, 2021 07:08 IST India Infoline News Service

Domestic markets settled marginally lower in the holiday-shortened last week amid feeble global cues with the Sensex and Nifty ending lower by 0.2% and 0.5% respectively. Initially, the bias was positive, however, concerns over earlier than expected stimulus tapering by the US Fed combined with rising Delta variant COVID cases globally derailed the momentum. 

On the sector front, FMCG and IT managed to post decent gains while others slipped in the red with metals, realty and PSU banks being the top losers on the last week.

Expiry of August month derivatives contract, global cues, COVID situation and the performance of world indices, etc. will remain in focus.

Let us look at the key developments this week.

Covid cases in India

According to the Union Ministry of Health and Family Welfare on Sunday, India reported 30,948 new coronavirus infections, while the active cases declined to 3,53,398 comprising 1.09% of the total infections.

Maharashtra logged 4,141 fresh COVID-19 cases with active cases to 53,182. Besides, 145 COVID-19 deaths were reported in the day, taking the number of total fatalities to 1,35,962; 4,780 patients were discharged in the day, taking the tally to 62,31,999. The recovery rate in the state rose to 97%. The case fatality rate in the state is 2.11%.

Whereas, Kerala reported 10,402 new Covid-19 cases, 25,586 recoveries, and 66 deaths in the last 24 hours.

Nuvoco Vistas Corporation, Aptus Value Housing Finance and Chemplast Sanmar ahead of listing

Nuvoco Vistas Corporation will list its equity shares today, while Aptus Value Housing Finance and Chemplast Sanmar will debut on the stock exchange on August 24.

Gold & Silver Outlook

MCX Gold has remained mostly sideward during the week. On the daily chart, the price remained below the rising trend-line which it broke a few days back. Going forward, the price of gold may remain weak. On the lower end price has support at 46500/45700. On the higher end, the price has a resistance of 47700.

MCX Silver price has been in a negative bias during the week. On the daily chart, the price made another lower top during the week. Going forward, the trend may remain sideward to bearish. On the higher end, the price has resistance at 63000/64000. On the lower end price has support at 61000.

India's forex reserves decline $2.10 billion

According to the RBI data, India's foreign exchange reserves declined by USD 2.099 billion at USD 619.365 billion for the week ended August 13 due to a fall in core currency assets and gold. The country's reserve position with the IMF also fell by USD 14 million to USD 5.111 billion, as per the central bank data.

The Indian rupee on Friday declined by 15 paise to close at 74.39 against the US currency, tracking a lacklustre trend in the domestic equities and strengthening of the American currency in the overseas market.

Rupee will be in focus as market participants would closely eye Fed Chair's speech at the Jackson Hole symposium later in the month for any tapering signal.

FII & DII updates

FIIs have net sold Rs4,314.4cr worth of shares in the last week, taking the total net outflow to Rs819cr in August.

Economy data to be watched for

India’s foreign exchange reserves for the week ended August 20, and bank loan and deposit growth for the fortnight ended August 13 will be released on August 27.

Jackson Hole Economic Symposium is scheduled to be held for two days from August 26-28, wherein the key thing to watch out for would be Federal Reserve Chair Jerome Powell's speech with respect to tapering if any, as the concerns over tapering intensified especially after the recent FOMC minutes.

Eurozone will publish PMI data today, whereas European Central Bank (ECB) will publish the minutes of its July meeting on Thursday when it unveiled updated forward guidance on interest rates and implemented a new monetary-policy strategy designed to bolster inflation.

US Markets end higher on Friday

On the last week of Friday, U.S. stock indexes closed higher but still ended with losses for the week on fears over the spread of the coronavirus delta variant, the imminent tapering of Federal Reserve bond buying, and China’s restrictions on its economy.

The Dow Jones Industrial Average jumped 225.96 points or 0.7% to 35,120.08. The S&P 500 rose 35.87 points 0.8% to 4,441.67. The Nasdaq Composite Index gained 172.87 points or 1.2% to 14,714.66.

For the week, the S&P 500 fell 0.6%, the Dow declined 1.1% and the Nasdaq Composite lost 0.7%.

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