Key developments that will drive the markets this week

Let us look at the key developments this week.

Sep 06, 2021 07:09 IST India Infoline News Service

Domestic markets have seen another stellar run during the past few weeks scaling record heights. Sentiments were upbeat from the beginning, encouraged by favourable macro data, auto sales, etc. Consequently, both the benchmark indices tested new milestones as the Nifty crossed 17,000 and finally settled at 17,323 levels and Sensex surpassed the 58,000 mark with this all the sectors contributed to the move and posted healthy gains.

Coming week is a holiday-shortened one and participants will be watchful on the IIP data which is scheduled on September 10. Besides, the pace of vaccination and other COVID-related updates will also be in focus. Global markets have played a supportive role in the recent surge and their performance in the coming week would be equally important to maintain the prevailing bias.

The equity market will remain shut on September 10 for Ganesh Chaturthi.

Let us look at the key developments this week.

Covid cases in India

According to the Health Ministry, India's daily Covid-19 numbers were marginally higher on Sunday than Saturday as the country reported 42,766 new cases and 308 deaths were recorded during the period. Maharashtra recorded 4,130 cases and 64 deaths with 52,025 active coronavirus cases and the state's case recovery rate stands at 97.02%. While the fatality rate is 2.12%.

Whereas, the cumulative COVID-19 vaccine doses administered in India crossed the 68 crore mark with more than 71.61 lakh vaccine doses was administered till 7 pm on Saturday. India has been running the largest vaccination drive against COVID-19 since January 16 this year.

IIP numbers in focus

The industrial output (IIP) for the month of July is scheduled for September 10, Friday. With this, the deposit and bank loan growth for the fortnight ended on August 27 will also be released on Friday. Additionally, foreign exchange reserves for the week ended September 3 is also scheduled on Friday.

Ami Organics and Vijaya Diagnostic Centre ahead of allotment dates

Ami Organics and Vijaya Diagnostic Centre IPOs allotments are likely to be finalized on September 8 and the refunds to the unsuccessful bidders would be announced on September 9.

The initial public offer (IPO) of Ami Organics received bids for 42.22 crore shares as against 65.42 lakh shares on offer on the last day and the issue was subscribed 64.54 times.

The issue opened for bidding on Wednesday (1 September 2021) and will close (3 September 2021). The price band of the IPO was fixed at Rs603-610 per share.

Vijaya Diagnostic Centre IPO received bids for 11.36 crore shares as against 2.50 crore shares on Friday, according to stock exchange data. The issue was subscribed 4.54 times. The price band of the IPO was fixed at Rs522-531 per share.

Global cues to be remain in focus this week

The important data to be watched out for this week globally are as follows:
  • United States: Initial Jobless Claims for the week ended September 4 on Thursday, September 9; Wholesale Inventories for July; PPI for August on Friday, September 10.
  • Europe: Q1CY21 GDP estimates on Tuesday, September 7; ECB Interest Rate decision on Thursday, September 9.
  • China: Inflation for August on Thursday, September 9.
  • Japan: Q2CY21 GDP on Wednesday, September 8.
FII & DII updates

The foreign institutional investors (FII) turned buoyant in the Indian market as they net bought Rs6,867.73cr worth of shares in the week gone by, however, the domestic institutional (DII) investors net sold Rs1,421.12cr worth of shares last week.

Technical outlook

Markets continued to remain on a hot streak with the benchmark index closing on lifetime highs.  The index Option gamma writers ran for a cover as the indices finally breakout from their consolidation phase.

On the options front (September 30, 2021 expiry), Nifty 17000PE 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 price has moved up after a downwards consolidation on the daily chart. Technically, a consolidation followed by a rally indicates an upper hand by bulls. Besides, the price has ended above 50EMA. However, on the daily chart, 50EMA and 20EMA are in a bearish crossover. The daily stochastic is in a bullish crossover. Going forward, the price may find resistance around 47650. A decisive move above 47650 may induce a rally towards 48000/48500.

MCX Silver has witnessed a strong move after a consolidation breakout on the daily chart. However, on the higher end price found immediate resistance at 65530 (50 days exponential moving average).

US stocks closed mixed

U.S. stock indexes ended mixed on Friday, with the Dow Jones Industrial Average posting a weekly loss after monthly employment data from the Labor Department. The employment report sparked fresh questions about the job market’s recovery from the COVID-19 pandemic amid the spread of the delta variant.

The Dow Jones Industrial Average fell 74.73 points, or 0.2%, to 35,369.09, the S&P 500 slipped 1.52 points, or less than 0.1%, to 4,535.43 and the Nasdaq Composite Index rose 32.34 points, or 0.2%, to 15,363.52.

For the week, the Dow saw a modest 0.2% loss, while the S&P 500 gained 0.6% and the Nasdaq posted a weekly advance of 1.6%. Meanwhile, the US market will remain closed on Monday on account of Labor Day.

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