Indian Stocks Eye Key Data Releases & Trade Deal Updates Amidst Positive Momentum
Mumbai: Indian stock markets are poised for a potentially impactful week, with seven key factors expected to drive market action, including crucial economic data, global cues, and developments in the India-US trade relationship. The market closed on a positive note, bolstered by recent economic resilience and technical indicators, but faces a landscape of both opportunities and potential headwinds.
Recent economic data showed India’s GDP growth at 8%, the fastest pace in five quarters, signaling continued economic strength. The streamlining of GST tax slabs by the GST Council to 5% and 18% has also contributed to optimism,particularly within cyclical sectors. Technically, the Nifty index demonstrated a bullish trend, reclaiming key moving averages (20 and 50 EMAs) and exhibiting positive signals from the RSI and MACD indicators.
However, several factors will be closely watched this week:
1) Domestic Economic Data: Investors will be scrutinizing August inflation data, scheduled for release on September 12th, alongside figures for bank credit and deposit growth, and forex reserves. The recent underperformance of the banking sector makes these data points particularly notable.
2) Global Economic Indicators: Key U.S. economic releases – including consumer inflation expectations, Producer Price Index (PPI), Consumer Price Index (CPI), jobless claims, and consumer sentiment – will be pivotal in shaping expectations for federal Reserve policy and influencing global investment flows.
3) India-US Trade Deal: Any progress or updates regarding a potential India-U.S. trade deal could provide a significant boost to market sentiment.
4) Technical Levels: The Nifty currently finds itself consolidating within a triangle pattern, with resistance at 25,153.65 (August 21) and 24,980.75 (September 4). According to Ajit Mishra, SVP-Research at Religare Broking, “A decisive breakout above 25,000 could trigger fresh momentum, taking the index toward 25,250 and then 25,400. On the downside, the 24,280-24,400 zone offers immediate support, with stronger support at 24,150.” The index rebounded from a low of 24,400, slightly above the previous swing low of 24,337.5.
5) Commodity Prices: Gold prices have risen following signals of a potentially less hawkish Federal Reserve, while crude oil has stabilized amid easing geopolitical tensions and increased demand.6) Foreign Institutional Investor (FII) Activity: Throughout the past week, Foreign Institutional Investors (FIIs) were net sellers, offloading approximately Rs 5,667 crore worth of equities. However, Domestic Institutional investors (DIIs) provided a crucial counterweight, absorbing the supply with inflows of around Rs 13,444 crore.
7) Rupee Volatility: The indian Rupee briefly touched a record low of 88.36 against the US dollar due to concerns surrounding tariffs, but timely intervention by the reserve Bank of India (RBI) helped to stabilize the currency and contain volatility.
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