Investors eye next level cues this week

Buoyed by positive global sentiments, including better-than-expected US economic numbers and increasing expectations for a September rate cut from the US Federal Reserve, stable oil prices, slowdown in FII selling and robust DIIs buying; the domestic stock markets continued their recovery towards record highs for another week. BSE Sensex gained 0.81 percent to close at 81,086 and NSE Nifty rallied 1.15 percent to 24,823. The Nifty Midcap-100 index was up 1.6 percent and Nifty Smallcap-100 jumped 3.5 per cent. FIIs have net sold Rs1,609 crore worth shares in the week gone by, taking the total monthly outflow to Rs30,586 crore in August, but DIIs continued to provide a solid support to the market on every dip. DIIs bought Rs13,020 crore worth shares for the week, and Rs47,080 crore for the month. It is interesting to observe that FIIs have been net buyers for Rs12,367 crore through the primary market so far in August. In the near-term market will react to the GDP growth numbers for the June 2024 quarter. Economists expect growth in the 6-7 per cent range for the first quarter of current financial year, against 7.8 per cent in March FY24 quarter.

Contraction in government capital expenditure and a dip in urban consumer confidence may impact the growth. The RBI already lowered its growth forecast for Q1FY25 to 7.1 per cent, from 7.3 per cent earlier. At the start of coming week, the market will first react to the Federal Reserve Chair Jerome Powell’s speech in the Jackson Hole Economic Symposium, wherein he clearly signalled the first rate cut in September policy meeting. The US dollar index fell to more than a year low (at 100.68), while the 10-year bond yield dropped to 3.804 per cent. India’s largest listed conglomerate Reliance Industries (RIL) will hold its AGM on August 29. The Ambanis have a history of making key announcements at the AGM.