In the highly volatile last week, Indian benchmark indices lost one percent each and snapped the five-week gaining streak amid mixed global cues and rising dollar and crude oil prices. Buying by foreign investors, however, provided some support on the downside. For the week, the BSE Sensex shed 812.28 points (1.32 per cent) to end at 58,833.87 while the Nifty50 fell 199.55 points (1.12 per cent) to close at 17558.9 levels. However, in this month till now, the Sensex and Nifty have gained over two percent each.
Experts said, on Monday, the market may react negatively to Fed Chair Jerome Powell’s comments saying that the rate hikes will continue to bring inflation at 2 per cent target, at the cost of pain in consumers and businesses, but overall, the coming truncated week is expected to continue to see volatility and consolidation, with focus on global cues as well as Reliance Industries’ AGM, macroeconomic data points, and monthly auto sales numbers.
Ajit Mishra, VP – Research, Religare Broking, said: “The coming week is a holiday-shortened one and it marks the beginning of the new month also, so participants will be eyeing important data like auto sales numbers. Before that, we’ve Reliance AGM on Aug 29 and core sector data and GDP data scheduled on Aug 31. Amid all, the performance of global indices, especially the US, would remain on the radar. It would be critical to see how our markets react to the US fall on Monday as we have been showing tremendous resilience so far. A decisive breach of 17,300 would push the bulls on the back foot and Nifty might retrace towards the 16,900 zone, else consolidation would continue.”
The market will remain shut on August 31 for Ganesh Chaturthi.
Key Points For Investors
Reliance Industries 45th AGM
In the beginning of next week, the market participants will closely watch the 45th Annual General Meeting of index heavyweight Reliance Industries which will start at 2 pm on August 29, with speech and presentations by Chairman Mukesh Ambani and other key members.
In the beginning of September, all eyes will be on monthly auto sales numbers. Hence auto stocks including Tata Motors, Maruti Suzuki, Bajaj Auto, Mahindra & Mahindra, Eicher Motors, TVS Motor, Ashok Leyland, and Hero MotoCorp will be in focus in later part of this week.
Fed Chair Jerome Powell’s speech
Markets may face volatile trends on Monday after Federal Reserve Chair Jerome Powell’s speech at the Fed’s annual economic symposium in Jackson Hole on Friday.
“Powell sounded ultra hawkish in his brief speech at Jackson Hole. Markets will be concerned about the tight monetary conditions persisting longer than expected. The near-term impact on equity markets will be negative,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
Federal Reserve Chair Jerome Powell delivered a stark message on Friday: The Fed will likely impose more large interest rate hikes in the coming months and is resolutely focused on taming the highest inflation in four decades.
Most of the announcements on the economic front will be seen between Wednesday and Friday next week. The GDP growth for the quarter ended June 2022 will be keenly eyed by the market participants who expect double-digit growth with opening of all economic activities including services and trade.
Barclays forecasts India’s economic growth accelerated to 16 percent YoY in Q2CY22 or June FY23 quarter. “The robust sequential recovery in place since Q2-2021, when COVID-19’s Delta variant forced widespread lockdowns, likely hit another high in Q2-2022. The economy was fully opened, with all activity restrictions removed. While some supply headwinds were evident in the form of lingering intermediate-good shortages and higher input costs, we expect both the domestic goods and services sectors to show impressive recoveries in Q2 2022,” Rahul Bajoria, MD & Chief India Economist said.
Nifty Technical Outlook
“Technically, Nifty is facing resistance at the psychological level of 18,000 and now 20-DMA looks under threat. If the Nifty slips below 20-DMA of 17500 then we can expect a fall towards 17,150/17,000 levels where 17000 is key psychological support as well as 200-DMA. On the upside, 17,700 is an immediate hurdle. The overall trend is still bullish therefore any dip around 200-DMA will be a good buying opportunity,” Santosh Meena, Head of Research, Swastika Investmart Ltd., said.
Banknifty faced resistance at 39,500 while 38,500-38,000 is an immediate support area; below this, we can expect a fall towards the 37,250-37,000 zone. On the upside, 39,000-39,500 is an immediate supply zone, Meena added.
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