NEW DELHI: Beating mixed global cues, Sensex and Nifty gained nearly 2% last week with all sectors participating in the broad-based rally which was backed by strong economic outlook and macroeconomic data such as robust GDP and PMI figures.
Nifty is now just 172 points away from the all-time high of 19,992, made on July 20 and analysts are now eyeing 20,000 level this week itself.
“In the broad market, mid- and small-cap stocks attracted strong buying interest, even though their valuations were relatively high. Moreover, heightened order inflows made sectors like infrastructure and realty particularly attractive to investors during the week,” said Vinod Nair, Head of Research at Geojit Financial services.
Here are top 5 factors that may sway the markmood in the week:
FII flow
After buying non-stop in the last 6 months, FIIs have sold Indian stocks worth Rs 4,203 crore in September so far amid rising US bond yields and the uptrend in the dollar index. Sharp currency weakness in China and Japan against the dollar also weighed heavily on the local currency leading to foreign fund outflows.
If the US treasury yields continue to rise and other currencies falter against the US dollar further, foreign fund inflows may remain choppy and overseas investors could exit emerging markets, including India, said Shrikant Chouhan of Kotak Securities.
Crude oil
Brent crude prices are now hovering around the $90 a barrel mark after gaining about 5% in the week after worries about tight oil supplies after Saudi Arabia and Russia extended supply cuts. Oil-sensitive stocks may remain in focus in the week ahead.
Macro data
The market is eagerly awaiting data on inflation and industrial production to provide further guidance. Industrial production and CPI data would be out on September 12, trade data on 13th while the wholesale price data would be released on the 14th.
IPO watch
Ratnaveer Precision Engineering and Rishabh Instruments will list on Monday. Tuesday would be the last day to apply for EMS IPO. On Wednesday RR Kabel IPO would be open for subscription while on Thursday SAMHI Hotels IPO would open.
Technical factors
With a trendline breakout combined with a decisive close above 19,650, Nifty index looks set to inch towards a newer high. “It may take a breather around the milestone of 20,000 and then progress to 20,300 level. On the downside, the 19,500-19,650 zone would offer the cushion, in case of any profit taking,” said Ajit Mishra of Religare Broking.
