by admin | May 25, 2021 | Economy, Investing, Markets, News
By Rohit Vaid,
Mumbai : Macro-economic data points and the direction of foreign funds’ flow are expected to influence sentiments of investors and set the tone for the Indian equity markets in the upcoming week, feel senior analysts.
Other important factors such as the geo-political situation in the Korean peninsula, rupee’s movement and government’s measures to tackle the non-performing assets (NPAs) will also have a major bearing on the stock markets.
Market observers pointed out that investors would take cues from the upcoming macro-economic inflation and industrial production data points.
The Central Statistics Office (CSO) will release the IIP (Index of Industrial Production) and CPI (Consumer Price Index) data points on September 12, Tuesday.
The CPI numbers will be followed by that of foreign trade figures and the release of WPI (Wholesale Price Index) data on September 14.
“Next week is going to be data heavy with the release of CPI, IIP and WPI. These are expected to have a major impact on the markets,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
“These macro-economic data points will also be viewed keeping an eye out on the earnings growth.”
Besides the macro-economic data, geo-political developments and a slowdown in domestic investment flows are likely to make investors nervous.
“Global geo-political development, especially the one taking place in the Korean peninsula, will be keenly followed by the investors,” Devendra Nevgi, the Zyfin Advisors Chief Executive, said.
“After large outflows of foreign funds, even domestic funds slowed down last week. This trend needs to be tracked as high prices, which are based mostly on PE expansion, might not sustain on such levels with a slowdown in domestic flows,” Nevgi explained.
Provisional figures from the stock exchanges showed that DIIs (domestic institutional investors) bought scrips worth Rs 1,210.12 crore last week. But, foreign institutional investors (FIIs) continued with their selling spree and off-loaded stocks worth Rs 3,426.51 crore.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 3,409.13 crore, or $531 million, during September 4-8.
In addition to investments, Indian currency’s movement against the US dollar would be closely watched by investors. The Indian rupee strengthened by 23 paise on a week-on-week basis to close at 63.79 to a US dollar from its previous week’s close of 64.02-03.
“A strong macro story and positive risk environment will continue to favour rupee. We expect a range of 63.70 to 64.20 over the near-term on spot,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.
On technical levels, the NSE Nifty is in a consolidation phase in a range of 9,861-9,983 points, according to Deepak Jasani, Head – Retail Research, HDFC Securities.
“Further directional cues are likely to emerge on a move beyond this range,” Jasani said.
Last week, global cues and sustained outflow of foreign funds dragged the key equity indices in the red after three consecutive weeks of gains.
Consequently, the 30-scrip Sensitive Index (Sensex) of the BSE declined by 204.71 points or 0.64 per cent to 31,687.52 points from its previous week’s close.
Similarly, the NSE Nifty50 closed at 9,934.80 points, down 39.6 points or 0.4 per cent.
(Rohit Vaid can be contacted at rohit.v@ians.in)
—IANS
by admin | May 25, 2021 | Economy, Markets, News
ket
By Rohit Vaid,
Mumbai : Global cues, along with the government’s measures to revive growth and tackle the non-performing assets (NPAs) issue are expected to determine the way forward for the Indian equity markets during the upcoming week.
Besides, the rupee’s movement against the US dollar and the direction of foreign funds flow will also have a major bearing on the trajectory of the equity indices.
“Equity markets are expected to remain range-bound next week and driven mostly by stock-specific action. However, investors will take cues from global developments, especially the geo-political situation,” Devendra Nevgi, Chief Executive of Zyfin Advisors, told IANS.
“On the domestic front, reform developments over the NPA issues and growth concerns after the subdued GDP numbers will be eyed. Nevertheless, domestic flows are expected to continue despite negative macros.”
Apart from global cues, Indian currency’s movement against the US dollar would be keenly watched by investors, as earnings of export-oriented sectors like IT and pharma might be impacted due to a strengthening rupee.
“On year-to-date basis, the Indian rupee has appreciated by 7.2 per cent. This will benefit the import segment and lower inflation. However export-oriented sectors like software, pharmaceuticals, automobiles and textiles will suffer,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.
“This will impact their guidance, earnings per share and subsequently impact their scrip prices.”
However, on a weekly basis, the Indian rupee closed flat at 64.02-03 to a US dollar.
According to Hariprasad M.P., Senior Vice President and Head Treasury at Centrum Direct, last week saw the US dollar-Indian rupee pair moving in a narrow range (63.90 to 64.20) with an appreciation bias for the Indian rupee.
“Resolution in the Doklam standoff with China and the general positive trend in the markets helped the rupee gain compared to the previous week,” Hariprasad said.
“The appreciation of the Euro against the US dollar also helped strengthen the Indian rupee. The pair is expected to again trade in a narrow range in the coming week .”
Another major factor for the Indian equity markets will be the direction of foreign funds flow given the pull-back in foreign institutional investors’ (FIIs) investment.
Figures from the National Securities Depository Ltd revealed that foreign portfolio investors (FPIs) divested equities worth Rs 14,706.68 crore, or $2.29 billion, during the month of August, whereas during August 28-September 1, FPIs invested in equities worth Rs 300.12 crore, or $46.99 million.
Provisional figures from the stock exchanges showed that FIIs sold stocks worth Rs 2,352.07 crore, while DIIs (domestic institutional investors) bought scrips worth Rs 3,399.8 crore during the week ended September 1.
On technical levels, the NSE Nifty is expected to make upward movement towards 10,070 points.
“Technically, Nifty, having closed above 9,952 points, looks set for some more up-move towards 10,030-10,070 points next week,” Deepak Jasani, Head — Retail Research, HDFC Securities, told IANS.
“Weakness could emerge if the support of 9,851 points is broken.”
Last week, key equity indices gained around one per cent each on hopes of a rate cut by the Reserve Bank of India, coupled with short-covering and healthy auto sales and manufacturing data.
Consequently, the 30-scrip Sensitive Index (Sensex) of the BSE surged by 296.17 points or 0.94 per cent to 31,892.23 points.
Similarly, the Nifty50 of the National Stock Exchange (NSE) made gains. It closed at 9,974.40 points, up 117.35 points or 1.19 per cent.
(Rohit Vaid can be contacted at rohit.v@ians.in)
—IANS
