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What will drive markets this week? Jackson Hole, FII action, IPOs, all the cues

What will drive markets this week? Jackson Hole, FII action, IPOs, all the cues

The easing of US recession concerns and anticipation of a potential rate cut by the US Federal Reserve are likely to play a significant role.

Business Today Desk
Business Today Desk
  • Updated Aug 18, 2024 5:05 PM IST
What will drive markets this week? Jackson Hole, FII action, IPOs, all the cuesDomestically, key economic indicators to watch include the HSBC Manufacturing & Services PMI flash data for August, along with bank loan and deposit growth figures, and foreign exchange reserves. 

After a strong rebound on Friday that ended a two-week losing streak, the focus shifts to cues that could steer further market consolidation with a positive outlook. 

The easing of US recession concerns and anticipation of a potential rate cut by the US Federal Reserve are likely to play a significant role.

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The BSE Sensex gained 0.92 percent to close at 80,437, while the Nifty 50 rose by 0.71 percent to 24,541 over the past week. Midcap and smallcap indices also edged higher, with the Nifty Midcap 100 up 0.84 percent and the Smallcap 100 adding 0.14 percent.

Looking ahead, global events will be crucial, particularly the release of FOMC minutes and US Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium. Investors will closely monitor these for insights into the Fed’s monetary policy stance, especially as the September policy meeting approaches. While a 25 basis points rate cut is widely expected, some economists suggest a 50 basis points cut might be possible, given the declining inflation and signs of labor market weakness.

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Domestically, key economic indicators to watch include the HSBC Manufacturing & Services PMI flash data for August, along with bank loan and deposit growth figures, and foreign exchange reserves. 

On the global front, US jobless claims, new home sales, and inflation data from Europe and Japan will also be significant.

Institutional flows remain a critical factor, with foreign institutional investors (FIIs) continuing to be net sellers last week, while domestic institutional investors (DIIs) showed strong buying interest. FIIs offloaded shares worth Rs 8,616 crore, bringing the month’s outflow to Rs 28,977 crore, while DIIs bought Rs 10,560 crore during the week, pushing their August total to Rs 34,060 crore. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, FII selling may persist, given India’s position as one of the most expensive markets globally.

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In the primary market, a busy week is expected with seven IPOs set to launch, including two from the mainboard segment. The Rs 600-crore IPO from Interarch Building Products and the Rs 215-crore issue from Orient Technologies are among the highlights. Additionally, five SME IPOs will open, contributing further to market activity.

On the technical front, the Nifty 50 looks strong after Friday’s rally, which pushed the index above key moving averages and formed a bullish candlestick pattern. Analysts suggest that if the index surpasses 24,700, it could close the bearish gap from earlier in August and aim for the 25,000 mark. Support is seen at 24,300-24,200.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Aug 18, 2024 5:05 PM IST
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