Key developments that will drive the markets this week

Let us look at the key developments this week.

Aug 30, 2021 07:08 IST India Infoline News Service

Indian domestic markets last week witnessed a tug of war between bulls and bears, with benchmark indexes mainly swaying sideways and investors remaining cautious. Consequently, the Nifty settled around the week’s high at 16,705 levels, up by 1.5%. A mixed trend was witnessed on the sectorial front, however, select heavyweights attracted noticeable buying interest. The broader market also took a breather after the recent slide and ended with decent gains.

In the coming week, participants will be eyeing crucial macroeconomic data with GDP and Infrastructure Output data followed by the monthly auto sales, Markit Manufacturing PMI data and Markit Services PMI data.

Further, markets will be initially taking cues from global counterparts, in reaction to the statements made by the US Fed Chair in the Jackson Hole symposium. In line with the latest Fed meeting minutes, he also signaled the beginning of tapering by the end of this year however sounded flexible on rate hikes.

Let us look at the key developments this week.

Covid cases in India

According to the Union Ministry of Health and Family Welfare, India reported 45,083 new coronavirus infections in the last 24 hours, taking its overall Covid-19 tally to 3,26,95,030, while active cases registered an increase for the fifth consecutive day.

Maharashtra on Sunday reported 4,666 new coronavirus positive cases, which increased its tally to 64,56,939, while 131 deaths pushed the toll to 1,37,157, the health department said. So far, 2,03,210 tests have been carried out in the state for COVID-19 detection, which took the overall test count to 5,36,59,613.

Mumbai city reported 345 new cases and two deaths. With this, the caseload in the city went up to 7,43,499 and the death toll to 15,974 deaths, the health ministry said on Sunday.

Macro data in focus

India’s GDP numbers for the first quarter of FY22 will be released on Tuesday as market participants believe that the economic growth is expected to be robust due to a low base in a year-ago quarter.

With this the Controller General of Accounts (CGA) will release the central government’s spending and revenues data as of July on Tuesday. India’s manufacturing PMI index will be released on Wednesday and services PMI is on Friday and also Foreign exchange reserves for the week ended August 27.

Monthly Auto sales to be watched for

The auto stocks are expected to be in focus on September 1 in the middle of the week as companies will start releasing August sales data from Wednesday. As experts predicted the recovery in sales is expected to continue in August and festive season momentum could support September data.

Maruti Suzuki, Tata Motors, Bajaj Auto, Eicher Motors, TVS Motor Company, Mahindra & Mahindra, Ashok Leyland and Escorts will be in focus.

IPO season continues

Specialty chemical company Ami Organics, and diagnostic chain operator Vijaya Diagnostic Centre are the two companies will open their IPOs during September 1-3.

Ami Organics set the price band of Rs603-610 per equity share and plans to raise Rs569.63cr, while Vijaya Diagnostic Centre intends to garner Rs1,895.03cr through IPO, at the higher end of the price band of Rs522-531 per equity share.

FII & DII updates

Foreign institutional investors (FIIs) sold equities worth Rs6833.33cr, while domestic institutional investors (DIIs) bought equities worth Rs6,382.57cr on the last week. So far in August, FIIs have sold equities worth Rs7,652.49cr and DIIs have bought equities worth Rs8,078.24cr.

Technical outlook

Markets witnessed a strong upward momentum during the week with the benchmark index closing on record highs. Option gamma writers dominated the F&O space as the indices traded in a narrow range for the major part of the week. On the options front (September 30, 2021 expiry), Nifty 16500PE strike price has witnessed fresh writing, hinting a formation of a floor level for the index around the mentioned strikes in the coming days.

Gold & Silver outlook

MCX Gold has remained mostly sideward during the week. On the daily chart price failed to move above the rising trend-line which it broke few weeks back. The price has ended just above the 50EMA on the daily time frame. The daily RSI is in bullish crossover. Going forward, the price of gold may remain positive.

MCX Silver price has remained in a positive bias during the week. On daily chart, the price moved up a bit after a brief consolidation. However, the price remained below 20EMA as well as 50EMA; besides 20EMA and 50EMA are in bearish crossover. The momentum indicator RSI is in a bullish crossover on the on daily chart. Going forward, the trend may remain sideward to bullish.

Sovereign Gold Bond Series VI opens on today

The Reserve Bank of India (RBI) has announced the Sovereign Gold Bond Scheme 2021-2022, Series VI, will be open for subscription today and it will remain open for subscription for five days. The issue price for the next tranche of Sovereign Gold Bond Scheme 2021-22, has been fixed at Rs4,732 per gram of gold. The nominal value of the bond works out to Rs4,732 per gram of gold.

2021-22 Series 6 SGB will remain open for subscription from August 30 to September 3, 2021. The bond will be issued on September 7, 2021.

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