In the last week Indian stock markets showed positive trend by gaining nearly one percent and continued its recovery rally amid positive signals from global markets. The coming week is expected to be a volatile one for local equity markets on account of futures and options (F&O) expiry, which is scheduled to take place on August 29, 2024.
On macro front, investors would be watching out the data of government budget value, foreign exchange reserves data on August 30. The government recorded a budget deficit of Rs 1.38 lakh crore in the first quarter of the 2025 fiscal year, narrowing considerably from the Rs 4.51 lakh crore in the corresponding period of the previous year. On the same day, traders will be eyeing the Infrastructure Output and Gross Domestic Product (GDP) data.
US market data: On the global front, investors would be eyeing few economic data from world’s largest economy the US, starting with Dallas Fed Manufacturing Index on August 26 followed by Redbook, CB Consumer Confidence, on August 27, GDP Growth Rate, Initial Jobless Claims, Pending Home Sales on August 29, Personal Income, Personal Spending, Baker Hughes Oil Rig Count on August 30.
Nifty Outlook: Rupak De, Senior Technical Analyst at LKP Securities said, Nifty experienced another day of lacklustre movement. The RSI is showing a bullish crossover, and the trend remains positive as it closed above the 21 EMA. “The market seems to favour a ‘buy-on-dips’ strategy while it stays above 24,650. On the upside, Nifty faces resistance at 24,850-24,900/25,000. On the downside, the index could see a significant correction if it falls below 24,650" De said.
Bank Nifty: Amol Athawale, VP-Technical Research, Kotak Securities commented, for Bank Nifty 20-day SMA or 50,700 would be the immediate reference point for the bulls. “As long as it is trading above the same, the bullish sentiment is likely to continue. On the higher side, it could move up till 50-day SMA or 51,500. Further upside may also continue which could lift the index till 51,800. On the flip side, below 50,700 it could retest the level of 50,250-50,000”.
Foreign investments: According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the trend of FIIs buying stocks through the ‘primary market and others’ category and selling through the exchange continued last week, too. There were bulk deals also executed through the exchange. The logic behind this divergent trend of selling through the exchange and buying through the primary market is the difference in valuations i.e, lower valuations in the primary market and high valuations in the secondary market. In August through 23 FIIs sold equity for Rs 28,671 crore through the exchanges and bought equity for Rs 12,367 crore through the primary market.
The Jackson Hole speech of the Fed chief Jerome Powell clearly signals Fed’s pivot. The rate cutting cycle will begin in September and this will provide further resilience to stock markets globally, Vijayakumar added.
In the first fortnight of August FIIs were big sellers in financials in India. Selling was witnessed in many other sectors including metals on fears that economic slowdown in US and China will keep metal prices soft. FIIs were buyers in telecom and health care where the growth and earnings prospects are safe and bright,” he said.