Weekly Market Outlook

Indian equity benchmarks concluded the previous week with a slight decline of half a percent, breaking their four-week winning streak, as traders chose to secure profits in speculative investments due to apprehensions about interest rates being rekindled by robust economic data from the U.S.

The markets commenced the week with a pessimistic tone as traders expressed worries over the slight increase in retail inflation for farm workers and rural labourers in June, with inflation figures rising marginally to 6.31 percent and 6.16 percent, respectively, compared to 5.99 percent and 5.84 percent in May this year.

Cautiousness extended on Dalal Street as a private report indicated that the rise in inflation prompted Indian investors to postpone rate cut expectations by at least a quarter to the middle of 2024, with concerns of further repricing due to sustained price increases.

Nevertheless, a significant rebound throughout the week enabled markets to erase all their initial losses, as traders found encouragement from the International Monetary Fund (IMF) revising India’s growth rate projection for 2023 upward by 0.2 percentage point to 6.1 per cent in its latest update of the World Economic Outlook (WEO).

Traders also remain concerned with reports that vegetable prices in India are set to stay higher for longer, as erratic monsoon rains delayed planting and damaged ripening crops, resulting in vegetable prices, with a 6% weighting in the overall consumer price index (CPI), hitting a seven-month high in June, rising 12% month-on-month.

BSE movement for the week

During the week ended July 28, 2023, the Bombay Stock Exchange (BSE) Sensex declined by 524.06 points or 0.79%, closing at 66,160.20.

The BSE Midcap index recorded a gain of 612.54 points or 2.07%, closing at 30,159.82, while the small-cap index surged by 401.8 points or 1.18% to reach 34,548.46.

On the sectoral front, the following sectors were top gainers: S&P BSE Power rose by 259.55 points or 6.46% to 4,279.83, S&P BSE Realty increased by 217.84 points or 5.08% to 4,508.91, S&P BSE Healthcare surged by 1,054.35 points or 3.95% to 27,747.05 and S&P BSE Metal advanced by 607.25 points or 2.86% to 21,803.98.

The top losing sectors were as follows: S&P BSE BANKEX declined by 803.12 points or 1.54% to 51,319.66, S&P BSE Fast Moving Consumer Goods (FMCG) decreased by 266.60 points or 1.38% to 19,069.15 and S&P BSE Finance was down by 88.74 points or 0.91%.

NSE movement for the week

 The Nifty slipped 98.95 points or 0.50% to 19,646.05.

On the National Stock Exchange (NSE), Bank Nifty decreased by 607.10 points or 1.32% to 45,468.10, Nifty IT declined by 380.80 points or 1.27% to 29,490.25, whereas Nifty Mid Cap 100 advanced by 557.65 points or 1.52% to 37,357.15, and Nifty Next 50 surged by 981.65 points or 2.22% to 45,166.40.

FII transactions during the week

During the week, Foreign Institutional Investors (FIIs) were net buyers in the equity segment, with gross purchases amounting to Rs 55,613.79 crore and gross sales of Rs 54,052.41 crore, resulting in a net inflow of Rs 1,561.38 crore.

In the debt segment as well, Foreign Institutional Investors (FIIs) were net buyers with gross purchases totalling Rs 3,495.68 crore and gross sales amounting to Rs 2,787.53 crore, leading to a net inflow of Rs 708.15 crore.

In the hybrid segment, Foreign Institutional Investors (FIIs) were net sellers, with gross purchases amounting to Rs 43.57 crore and gross sales totalling Rs 63.97 crore, resulting in a net outflow of Rs 20.40 crore.

Outlook for the coming week

The markets showed a negative trend after the Federal Reserve raised interest rates to their highest level in more than two decades, and in the upcoming week, traders will be closely eyeing macro data and monthly sales numbers from auto companies to keep the markets active.

Traders are anticipating the release of the S&P Global Manufacturing PMI on August 01, the S&P Global Services PMI and S&P Global Composite PMI on August 03, and Foreign Exchange Reserves data on August 04.

During the ongoing earning season, market participants will primarily focus on the earnings reports of various companies, including Adani Green Energy, Adani Transmission, Gail (India), Maruti Suzuki India, UPL, Godrej Properties, Hindustan Petroleum Corporation, Bharti Airtel, Blue Star, Dabur India, Eicher Motors, Lupin, MRF, Zomato, Zydus Wellness, BHEL, Mahindra and Mahindra, State Bank of India, Bank of Baroda, and others.

On the global front, traders will closely watch the release of the Chicago PMI and Dallas Fed Manufacturing Index on July 31, and subsequently, on August 01, they will keep an eye on Redbook, S&P Global Manufacturing PMI, ISM Manufacturing PMI, and ISM Manufacturing Employment data from the US.

On August 03, traders will be closely monitoring a series of economic indicators including Initial Jobless Claims, S&P Global Services PMI Final, S&P Global Composite PMI Final, ISM Services PMI, ISM Services Employment, Factory Orders, ISM Services Business Activity, and ISM Services Prices.

On August 04, they will be looking for updates on the Unemployment Rate, Non-Farm Payrolls, Participation Rate, Government Payrolls, and Baker Hughes’s Total Rig Count.



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