Stock Market

Factory & inflation data, global cues to drive market next week

Chillicious Bureau

Benchmark indices closed higher but off the week’s highs due to profit booking (in the last trading session) triggered by uncertainties following North Korea’s biggest nuclear test and absence of an expansion in monetary stimulus programme by the European Central Bank.

After hitting fresh 52-week highs, the Sensex ended 0.9 percent higher and the Nifty was up 0.6 percent. The uptrend continued for the second consecutive week due to rally in the week’s first trading session on hopes of delay in US rate hike after disappointing jobs data.

Foreign institutional investors net bought more than Rs 2,000 crore worth of Indian equities during the truncated week.

As the market is inching towards record highs, the volatility and profit booking are warranted in current environment, say experts who are cautious ahead of macroeconomic data and Federal Reserve’s policy meeting later this month.

According to them, despite expected profit booking amid consolidation initially in the next week, the Nifty is likely to start approaching 9000 level soon. They feel such intermittent correction strengthens the bull market.

“As long as market is trading above 8700 level we don’t see anything that will change positive outlook. In short term, market may see short term pull back if it failed to hold above 8880 but technical setup of the market is still bullish and among momentum indicator there is nothing which is indicating otherwise,” Rohit Gadia of CapitalVia Global Research says.

On the downside, strong support exists around 8830-8850 which in any short term pull back is likely to hold, he says, adding aggressive trader is advisable to initiate long if market comes down to this level.

Indian equities will remain shut on Tuesday for Bakri Id holiday.

On Monday, the market may react to weak global cues following sharp fall in Wall Street (Dow Jones tanked 2 percent on Friday).

The week will start with macroeconomic data – July industrial output and retail inflation (CPI) that will be announced on September 12 and WPI on September 14.

The last bunch of June quarter earnings (Tata Steel, Coal India and Reliance Communications) will also be announced in the coming week. Among others Bajaj Hindusthan, Gitanjali, BGR Energy, NALCO, Reliance Power, Amtek Auto, MTNL, IL&FS Transportation, Reliance Infrastructure, Suzlon, BEML, CESC, IVRCL, NBCC, MMTC, Rolta and Unitech will also declare quarterly earnings.

In corporate action, HPCL, Minda Industries, Trent and Symphony shares will trade adjusted for bonus and split.

Oil marketing companies are likely to revise fuel prices during the week.

Another key factor to watch out for would be performance of monsoon after the country’s rainfall during this season was 4-5 percent below the long period average till September 9.

FIIs & DIIs trading activities are also important to watch out for, especially ahead of Federal Reserve’s two-day policy meeting on September 20-21.

Globally, Bank of England’s monetary policy and US industrial production & retail sales for August on Thursday will be closely watched.