Key developments that will drive the markets this week

Let us look at the key developments this week.

Oct 04, 2021 06:10 IST India Infoline News Service

Domestic markets fell Friday on weak global cues also heavy selling pressure on financials (excluding PSU banks) and IT dragged index. However, buying was seen in pharma, metals and PSU banks.

Further, better than expected sales volume for select automobile companies enabled the Nifty Auto index to recover from day’s low, while investors preferred to book some amount of profit in IT space ahead of September quarter earnings beginning from next week.

The coming week is going to be critical for financial markets as participants will be closely eyeing the MPC’s monetary policy review meeting and its outcome is scheduled on October 8.

Let us look at the key developments this week.

RBI monetary policy outcome in this week

The Monetary Policy Committee is to be held during October 6-8. The street is expected to keep the repo rate and accommodative stance unchanged in the policy meeting, but the RBI commentary overgrowth along with rising oil prices, improving Covid situation and global environment will be closely watched by the street.

Macro data & TCS result in focus

In this week, Markit Services PMI and Markit Composite PMI for September will be released on Tuesday, RBI policy, deposit and bank loan growth for the fortnight ended September 24, and foreign exchange reserves for the week ended October 1 will be released on Friday.

Tata Consultancy Services (TCS) will kick off the September 2021 quarter earnings season on Friday.

OPEC Meet to be watched out

The OPEC Plus group meets on Monday to review the output policy. In July, the group agreed to boost output by 4 lakh bpd a month.

FII & DII updates

Foreign portfolio investors (FPI) remain bullish on Indian equities as net bought in Indian shares worth Rs13,154cr ($1.8 billion) last month.

Covid cases in India & Vaccination drive

According to data from the Union Health Ministry data on Sunday, India reported 22,842 new Coronavirus infections in the last 24 hours, taking its overall Covid-19 tally to 3,38,13,903. The number of active cases in the country declined to 2,70,557, the lowest in 199 days. With 244 fresh fatalities, The Covid-19 death toll increased to 4,48,817, the Health Ministry said. Active cases now account for 0.80% of India’s total infections, the lowest since March 2020, as per health ministry data.

Meanwhile, Maharashtra on Sunday reported 2,692 new coronavirus positive cases and 41 fatalities while 2,716 patients were discharged, the state health department said.  The new additions pushed Maharashtra's COVID-19 tally to 65,59,349, the death toll to 1,39,207 and the number of recoveries to 63,80,670, the health department added.

Global cues back in action

US infra package - developments in Washington will be monitored keenly as lawmakers continue to debate an infrastructure spending package. With this data on employment in the US will be released on Friday.

Technical view

On the weekly charts, the Nifty has formed a bearish dark cloud cover candlestick while the Bank Nifty index has formed a bearish candlestick pattern, indicating a possibility of a continued profit booking. IT stocks like TCS, Tech Mahindra and Infosys were among the top underperformers, witnessing a rollover of fresh short positions going into the October series.

On the options front (October 29, 2021 expiry), the Nifty 18000CE strike price has witnessed fresh writing, hinting at a formation of a ceiling level for the index around the mentioned strikes in the coming days.

Gold & Silver outlook

MCX Gold price moved up after a downwards consolidation on the daily chart which has a positive significance. However, the upward journey was halted around the 20EMA, while the 20EMA and 50EMA has maintained a bearish crossover which shows the existing bearishness. On the lower end, immediate support is visible at 46000, below which price may correct towards 45300.

MCX Silver slipped below the previous consolidation on the daily chart suggesting a rising weakness. Going forward, a rise above 61500 may induce a rally in Silver price. On the lower end, the price has support at 59400.

India's forex reserves slip to $638.65bn

As per data released by the Reserve Bank of India (RBI) on Friday, India’s foreign exchange reserves declined to $638.65 billion during the week ended September 24. Overall forex reserves declined $997 million during the week from $639.64 billion seen in the previous week, the RBI data showed.

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