Nifty eyes 18,000-mark! 10 factors which could drive action in stock market in coming week
As we approach September expiry week, Aditya Agarwala, Senior Technical Analyst, YES SECURITIES, said stepping into the October series, bulls should be cautious as benchmark Indices are trading at overbought levels and a possible negative divergence is also developing between RSI and price on the daily time frame, which indicates that the uptrend may lose momentum soon
The BSE Sensex scripted history by breaching 60,000-mark for the first time ever as the 30-share index ended the Friday at 60,048.47, up 163.11 points or 0.27%. The broader Nifty also closed in the green with the Nifty 50 gaining 30.25 points to give a closing of 17,853.20 on the last day of the week. The Nifty saw a 0.17% jump on Friday's closing. On weekly basis, Nifty gained 1.5%, while Sensex soared 1.6% for the week ended September 24.
As the Sensex closed above 60,000 on Friday, it will be interesting to see how Nifty responds in the coming week, and whether the index crosses 18,000 mark or not.
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Sectorally, realty, banks etc. saw buying interest, while metals faced selling pressure for the week ended September 24.
Speaking about the Friday's closing, Vinod Nair, Head of Research at Geojit Financial Services, said, "Though the domestic market demonstrated a flattish trend in the beginning of the week due to global sentiments aided by concerns of central bank meetings and worries in the Chinese market, indices soared to close at record highs." He said Realty stocks outperformed other sectors owing to an increase in property registrations, and cut in stamp duty (Karnataka) and home loan rates. However, profit-booking was noticeable in mid & small-cap stocks, which were under pressure and can continue in the short-term.
We have collated a list of 10 factors that could dictate the trend on D-Street in the coming week:
1. September F&O Expiry
As we approach September expiry week, Aditya Agarwala, Senior Technical Analyst, YES SECURITIES, said stepping into the October series, bulls should be cautious as benchmark Indices are trading at overbought levels and a possible negative divergence is also developing between RSI and price on the daily time frame, which indicates that the uptrend may lose momentum soon.
2. PMI index for September 2021
In a relatively quiet week for domestic economic data releases, the market is bound to track global cues for direction, said Nair. "The Manufacturing PMI index for September which is to be released next week will help in forming a view on business activities during the month," he said.
3. Primary Market: Paras Defence listing, Aditya Birla Sun Life AMC IPO opening
There will be good action in the primary market next week as the shares of recently closed Paras Defence and Space Technologies IPO will be listed on the exchanges on October 1, while Aditya Birla Sun Life AMC IPO will open for subscription on September 29. Aditya Birla Sun Life AMC has fixed a price band of Rs 695-712 a share for its over Rs 2,768-crore initial share-sale.
Earlier, Paras Defence IPO issue saw massive response from investors on September 23, the last day of the subscription, as the offer saw whooping 304 times bidding. "The allotment status of the Paras Defence IPO will be available around September 28, 2021, and the allotted shares will be credited to demat account by September 30. For those who do not get shares, the refund initiation will begin on September 29," showed Upstox timeline for the IPO.
4. Quad summit
Prime Minister Narendra Modi, his Australian counterpart Scott Morrison, Japanese premier Yoshihide Suga and US President Biden participated in the first in-person summit of Quad leaders hosted by the US President. The summit kickstarted on Friday. ON Saturday, India, Australia, Japan and the US have pledged to work together for ensuring peace and prosperity of the Indo-Pacific and the world. This comes amidst muscle flexing by an assertive China in the strategic region. The Indian stock market is expected to react on developments leading to this summit when it opens on Monday.
5. Auto sales figure
With the month nearing to an end, the week will also see auto sale figure coming up, driving action in auto stocks. Meanwhile, as per India Ratings and Research (Ind-Ra) report, semiconductor supply shortage is expected to further impact passenger vehicles (PVs) sale volumes in September too.
At present, these shortages have forced several OEMs to slow down production, thus, further extending the waiting periods of popular, feature-rich and high-end models. Furthermore, the report said that `2W` volumes may remain tepid in September, although sequential recovery is expected to continue in 2HFY22, aided by demand coming from the reopening of educational institutes and offices.
The Indian rupee slipped by 4 paise to close at 73.68 against the US dollar on Friday, following weaker Asian peers against the American currency. At the interbank foreign exchange market, the local currency opened at 73.77. It touched an intra-day high of 73.61 and a low of 73.78 during the day, said a PTI report.
Jateen Trivedi, Senior Research Analyst at LKP Securities, "Rupee traded muted near 73.75 taking support near 73.85 and resistance of 73.60. Dollar index traded flat to sideways giving fewer cues for USDINR for any strong moves, Higher Crude prices kept the pressure on the rupee as the rupee kept taking resistance near 73.60. Going ahead the range for rupee can be seen between 73.50-73.90."
7. Technical Check:
The Nifty50 which scaled fresh high of 17,947 closed with gains of 1.5 percent for the week ended September 24. Experts advise traders to tread with caution as we enter the F&O expiry week.
"For the index, 17775-17700 could be the important support levels. On the flip side, 18000 and 18200 could act as a major resistance level. Contra traders can take a long bet near 17700 with a strict 16650 support stop loss, while partial profit booking is advisable between 18100 to 18200 level," Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said.
"Meanwhile, Bank Nifty has maintained a higher bottom formation. The key support levels are placed at 37200 followed by 36800. The structure suggests a further upside if it succeeds to trade above 37200," he said.
8. FII & DII Activity in Cash market:
As per the latest data as on September 24, 2021, Foreign institutional Investors (FIIs) and DIIs were net buyers in the cash market with Rs 7,137.72 crore and 1,030.37 crore, respectively. "Further, the FIIs’ return after a 5-month hiatus and the support garnered at every dip also point to the continuation of this optimism in Indian indices. As a result, every dip still offers a good opportunity to invest," said Samco Research in its report.
9. Corporate Actions:
The coming week is also buzzing with corporate actions as it will see actions in the form of rights issue to bonus to dividend. Kicks starting the corporation actions on Monday, Bharti Airtel will come up with its rights issue on September 27. The telecom giant is offering rights issue of 1 share for every 14 shares held at Rs 530. This is the second time, Bharti Airtel is coming up with its right issue since April 23, 2019. On the same day, Cosmo Films Ltd will offer dividend at 25% @ Rs 25 per share, while Galactico Corporate Services Ltd will see bonus in 1: 1 ratio. On September 28, Suumaya Industries Ltd will also give its shareholders Rs 2.75 per share dividend, while GKP printing & Packaging Ltd will see bonus split in 1: 1. CL educate Ltd will see the proposal for split of equity shares from the face value of Rs.10 per share to Rs.5 per share coming to fruition.
10. Covid Cases:
India reported 29,616 new COVID-19 infections and 290 deaths in the last 24 hours, showed the Union Ministry of Health and Family Welfare data on Saturday. Further increase in cases could cause panic in the equity market as Covid 19 third wave is expected to peak between October and November.
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