Weekly Market Outlook

Snapping a five-week losing streak, Indian equity benchmarks ended the passing week with a gain of three-fourths of a per cent as higher-than-expected domestic manufacturing PMI, and positive GDP growth data buoyed sentiments.

Markets made an optimistic start as traders took support with the commerce ministry’s statement that Indian and UK officials will continue their negotiations till the month-end to iron out differences on the proposed free trade agreement (FTA).

Markets extended gains after India Ratings said that with a falling trade deficit, India’s current account deficit is likely to narrow to around $10 billion or 1 per cent of GDP in the April-June quarter of the ongoing fiscal.

The country’s current account deficit (CAD) stood at $18 billion or 2.1 per cent in the corresponding period of the previous fiscal.

Union Minister for Labour and Employment Bhupender Yadav’s statement that more than 1.5 crore jobs have been created in nine organised sectors, including IT, manufacturing, trade and transport, during the nine-year rule of Narendra Modi government at the Centre.

Sentiments remained upbeat as RBI data showed that interrupting a two-month streak of decline, outward foreign direct investment (FDI) rose sequentially to $1.85 billion in July over $1.07 billion in June, an increase of 73 per cent.

Traders turned cautious and huge selling dragged markets lower on the penultimate day of the week with a private report stating that India is poised for its lowest monsoon rains in eight years, with the El Nino weather pattern seen crimping September precipitation after an August that is on track to be the driest in over a century.

Sentiments remain dampened with CARE Ratings’ report stating that the erratic monsoon, which is affecting sowing, and global developments will keep food inflation at elevated levels and would also hit the demand in rural India owing to lower income and inflation.

Buy buying on the final day of the week helped markets to end above their crucial 65,300 (Sensex) and 19,400 (Nifty) levels as traders reacted positively to the government data showing that India’s economy grew at the fastest pace in four quarters — at 7.8 per cent — in the April-June period of FY24, aided by a supportive base along with a robust increase in investment.

Sentiments remained positive with a private survey showing that India’s manufacturing sector activity continued to expand in August, with the S&P Global Purchasing Managers’ Index (PMI) rising to a three-month high of 58.6.

India’s gross tax revenue, comprising both direct and indirect taxes between April and July, reported a growth of merely 2.8 per cent to Rs 8.9 trillion compared to the same period a year ago.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex gained 500.65 points or 0.77% to 65,387.16 during the week ended September 01, 2023.

The BSE Midcap index gained 717.71 points or 2.34% to 31,435.62 and small cap index surged 1364.57 points or 3.78% to 37,420.53.

On the sectoral front, S&P BSE Metal was up by 1,285.22 points or 6.05% to 22,542.14, S&P BSE Realty was up by 243.50 points or 5.71% to 4,511.25, S&P BSE Consumer Discretionary Goods & Services was up by 231.27 points or 3.44% to 6,951.72, S&P BSE Power was up by 148.72 points or 3.44% to 4,470.70 were the top gainers.

S&P BSE Fast Moving Consumer Goods was down by 94.21 points or 0.51% to 18,515.25 was the only loser on the BSE.

NSE movement for the week

The Nifty gained 169.50 points or 0.88% to 19,435.30.

On the National Stock Exchange (NSE), Bank Nifty was up by 204.65 points or 0.46% to 44,436.10, Nifty IT was up by 599.80 points or 1.94% to 31,514.35.

Nifty Mid Cap 100 increased 974.35 points or 2.53% to 39,445.60 and Nifty Next 50 increased 712.20 points or 1.62% to 44,799.75.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 90,849.25 crore and gross sales of Rs 88,018.38 crore, leading to a net inflow of Rs 2,830.87 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 4,515.51 crore against gross sales of Rs 2,562.19 crore, resulting in a net inflow of Rs 1,953.32 crore.

In the hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 160.41 crore and gross sales of Rs 214.11 crore, leading to a net outflow of Rs 53.70 crore.

Outlook for the coming week

Traders will be looking forward to the S&P Global Services PMI and S&P Global Composite PMI which are scheduled to be released on September 05.

India is currently holding the G20 Presidency and the Summit meeting is scheduled to be held on September 9-10, 2023, at the Bharat Mandapam in Delhi’s Pragati Maidan.

Among those expected to arrive are US President Joe Biden, UK PM Rishi Sunak, Canadian PM Justin Trudeau, Japanese PM Fumio Kishida, and Saudi Arabian King Salman bin Abdulaziz Al Saud.

On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), starting with Factory Orders on September 05.

Redbook, S&P Global Services PMI, S&P Global Composite PMI, ISM Services PMI, ISM Services Employment, ISM Services Business Activity on September 06, Initial Jobless Claims on September 07 and finally Baker Hughes Oil Rig Count on September 08.





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