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D Street Week Ahead: Foreign fund flows, IPO activity and global cues likely to influence market

D-Street Week Ahead: Foreign fund flows, IPO activity and global cues likely to influence market

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By Sandeep Singh  Sept 4, 2022 8:17:41 AM IST (Published)

With the absence of domestic cues, the focus on Dalal Street is likely to shift to global cues, with a key rate decision by the ECB and a speech by Fed Chair Jerome Powell scheduled for this week. Foreign fund flows and movement in crude oil as well as the rupee will remain on investors' radar.

Investors' focus will shift to global cues — with key central bank decision and commentary — and foreign fund flows on Dalal Street this week, in the absence of domestic cues. Last week, a quarterly reading of GDP growth in India fell short of economists' estimates, monthly GST collections remained strong and auto makers reported a mixed bag of monthly sales.

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Globally, investors will track a slew of macroeconomic data from major economies, a key interest rate decision by the ECB and a speech by Fed Chair Jerome Powell for triggers.
Foreign fund flows and any wild moves in crude oil as well as the rupee will remain be on investors' radar.
What to expect
"Investors would likely take cues from action by global central bankers, the global growth trajectory and the movement in commodities. Back in India, investor focus would likely be on the management commentary of demand and margins in the festive season, the pace of government capex and the trajectory of rural growth," said Shibani Sircar Kurian, Senior EVP and Head-Equity Research at Kotak Mahindra AMC.
With valuations rerated recently, Indian equities are trading at a premium to emerging market historical levels on a relative basis, she pointed out. "This may lead to some near-term consolidation in the market, though we remain constructive over the medium term with growth outlook in India appearing to be relatively stronger than most other economies," Kurian added.
The week that was
In the holiday-truncated week that ended on September 2, Indian equity benchmarks slipped marginally as losses in IT shares offset gains in auto, FMCG and financial stocks.
As many as 30 stocks in the Nifty50 basket clocked weekly gains.
Bajaj Finserv, Tata Consumer, ITC, Mahindra & Mahindra and Asian Paints were the top gainers.
Titan, Adani Ports, Grasim, Apollo Hospitals and Larsen & Toubro — rising around 3—6 percent — were also among the top blue-chip gainers.
On the other hand, Hindalco, Shree Cement, Infosys, Reliance and ONGC were the top laggards.
Broader indices, however, eked out gains, with the Nifty Midcap 100 clocking its 11th weekly gain in a row.
IndexWeekly change (%)
Nifty Midcap 1000.9
Nifty Smallcap 1000.2
Foreign institutional investors remained net buyers of Indian shares for the first week after bringing in Rs 22,026 crore in August — the first month of inflows for Dalal Street since September 2021, according to provisional exchange data.
Technical view
The Nifty50 appears to have major support at 17,000 and continues to face a key hurdle at 17,800, said Ajit Mishra, VP-Research at Religare Broking.
"Banking and financial packs have played a critical role in capping the damage so far and their performance would remain key ahead. We recommend restricting positions to select sectors and stocks that are outperforming the benchmark," he said.
Here are the key factors and events that are likely to influence Dalal Street in the week beginning Sept 5:
Macroeconomic data
A PMI reading for services activity in India is due on Monday.
Tamilnad Mercantile Bank's IPO to raise up to Rs 832 crore will open for subscription on September 5 and close on September 7. The lender commanded a grey market premium ahead of the share sale.
The stock of Dreamfolks Services, whose IPO worth Rs 562 crore concluded last month with an overall subscription of 56.7 times, will debut on bourses on Tuesday, September 6.
Sept 5France, Germany, UK and Eurozone services PMI data, UK car sales data, Eurozone and France retail sales data, BoE MPC Member Catherine Mann to speakChina and Japan services PMI data
Sept 6Services PMI dataFrance, UK and Eurozone construction PMI data, Germany car registrations dataJapan household spending data
Sept 7Fed Beige Book, Fed Vice Chair for Supervision Michael Barr and Board of Governors Vice Chair Lael Brainard to speak, trade dataEurozone GDP data, Germany industrial production dataChina trade data
Sept 8Fed Chair Jerome Powell to speak, jobless data, crude oil stockpilesECB rate decision, France trade dataJapan GDP data
Sept 9Fed Board of Governors Member Christopher Waller to speakFrance industrial production dataChina inflation data
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