Weekly Market Outlook

It turned out to be a fabulous week of trade for Indian equity benchmarks with frontline gauges ending at all-time highs, supported by better-than-expected macro-economic data.

Key gauges started the week on an optimistic note as traders got encouragement after Finance Minister Nirmala Sitharaman said India’s external debt of $624.7 billion at March-end 2023 with a debt-service ratio of 5.3 per cent is within the comfort zone and modest from a cross-country perspective.

Some support also came in as the Reserve Bank said India’s forex reserves jumped by $4.039 billion to $598.897 billion for the week ended September 1. In the previous reporting week, the overall reserves had dropped by $30 million to $594.858 billion.

On the very next day, domestic markets witnessed some consolidation as rising global crude oil prices made investors jittery as this could fuel inflation and force central banks worldwide to maintain the rate hike regime.

Investors were worried amid a private report stating that foreign institutional investors have sold around $800 million in local equities in the past four sessions even as local bourses near their all-time highs.

Retail inflation based on the Consumer Price Index (CPI) declined to 6.83 per cent in August 2023 mainly due to softening prices of vegetables. Moreover, inflation based on the wholesale price index (WPI) remained in the negative territory for the fifth straight month in August 2023 at (-) 0.52% as against (-) 1.36% recorded in July 2023.

India’s industrial production measured in the Index of Industrial Production (IIP) jumped to 5.7 per cent in July 2023 from 3.7 per cent in June 2023.

Markets extended gains after Fitch Ratings in its September update of the Global Economic Outlook said that the Indian economy continues to show resilience despite tighter monetary policy and weakness in exports, with growth outpacing other countries in the region, retaining India’s growth forecast at 6.3% for the current fiscal year (FY24).

Investors digested the US consumer-price index data showing inflation picked up in August, but likely not by enough to prompt a September interest rate hike by the Federal Reserve. A rally on the final day of the week helped markets to end at fresh all-time closing highs.

Sentiments also remained upbeat after a private report stated that India has become the 13th country authorized to certify ‘measuring and weighing instruments’ based on globally accepted standards of the Paris-based IOLM, a development that will boost domestic exports of such products.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 1239.72 points or 1.86% to 67,838.63 during the week ended September 15, 2023.

The BSE Midcap index lost 166.63 points or 0.51% to 32,505.37, while the small-cap index slipped 437.97 points or 1.14% to 37,828.56.

On the sectoral front, S&P BSE TECK was up by 464.77 points or 3.19% to 15,024.28, S&P BSE BANKEX was up by 1,271.91 points or 2.51% to 51,844.91, S&P BSE Information Technology was up by 770.46 points or 2.36% to 33,468.30, S&P BSE Auto was up by 678.95 points or 1.86% to 37,161.01 and S&P BSE Finance was up by 178.64 points or 1.84% to 9,907.76 were the top gainers.

S&P BSE Oil & Gas was down by 225.60 points or 1.16% to 19259.72, S&P BSE Capital Goods was down by 558.37 points or 1.17% to 47045.67 and S&P BSE Power was down by 56.86 points or 1.21% to 4623.86 were the top losers.

NSE movement for the week

The Nifty surged 372.40 points or 1.88% to 20,192.35.

On the National Stock Exchange (NSE), Bank Nifty was up by 1075.10 points or 2.38% to 46,231.50 and Nifty IT was up by 939.40 points or 2.90% to 33,355.05.

On the other side, Nifty Mid Cap 100 decreased 147.85 points or 0.36% to 40,829.90 and Nifty Next 50 lost 58.95 points or 0.13% to 46,051.85.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in the equity segment in the week, with gross purchases of Rs 55,220.91 crore and gross sales of Rs 55,786.39 crore, leading to a net outflow of Rs 565.48 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 4,590.82 crore against gross sales of Rs 3,212.15 crore, resulting in a net inflow of Rs 1,378.67 crore.

In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 172.50 crore and gross sales of Rs 162.88 crore, leading to a net inflow of Rs 9.62 crore.

 Outlook for the coming week

In the passing week, key gauges witnessed a powerful performance, with Nifty and Sensex settling above their psychological levels of 20,150 and 67,800 respectively amid ease in retail inflation and a rise in industrial output.

In economic releases, traders will be eyeing the Foreign Exchange Reserves data, slated to be released on September 22.

On the same day, Bank Loan growth and Deposit growth data are going to be released. The value of loans in India increased 19.8 per cent year-on-year in the fortnight ending August 25, 2023.

Meanwhile, the trend in investment by foreign institutional investors and the movement of the rupee against the dollar will also be closely watched by the market participants.

The government has called a special session of Parliament from September 18 to 22. The bulletins issued by both the Rajya Sabha and Lok Sabha noted that on September 18, the first day of the special session, there will be a discussion on the subject, ‘Parliamentary Journey of 75 years starting from Samvidhan Sabha – Achievements, Experiences, Memories and Learnings’.

On the global front, investors would be eyeing few economic data from the world’s largest economy, United States (US), starting with Net Long-term TIC Flows, Building Permits, Housing Starts, and Redbook on September 19, followed by the Fed Interest Rate Decision, FOMC Economic Projections on September 20.

Fed Press Conference, Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Existing Home Sales on September 21, S&P Global Manufacturing PMI Flash, S&P Global Services PMI Flash, S&P Global Composite PMI Flash and Baker Hughes Total Rig Count on September 22.



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