The week witnessed a volatile start as global markets were not in favour of bulls. Measures taken by BSE to curb excessive price movement in smaller stocks also nudged selling pressure in small and mid-cap stocks. However, they recovered after a late clarification from BSE on limiting its restrictions to penny stocks.
“With positive economic data pointing towards economic recovery, the market is expected to remain bullish in the long term while the possibility of a short correction in the near term cannot be ruled out. On the backdrop of eased retail inflation, the wholesale price inflation data to be released next week is expected to cool down as well,” said Vinod Nair, Head of Research at Geojit Financial Services.
Here are key factors that will guide markets next week:
IPO listing
As many as four companies–Devyani International,
Diagnostics, Tiles and Windlas Biotech–will debut on exchanges this week. These will be eyed by investors. Grey market premiums for many of them have come down thanks to selling in broader markets. Besides, share allotment of Aptus Value and Nuvoco Vistas will also be finalised this week.
FII investments
Foreign institutional investors have turned net buyers of equity in the market. They invested over Rs 1,100 crore during the last one week. While DIIs are focusing on broader bourses, FPIs have begun to invest in large caps indicating revived interest after a four-month selling.
FOMC minutes
Investors will also keep an eye on the FOMC minutes, which will reveal the discussion during the last meeting of the Federal Reserve rate setting committee. Many officials from the central bank have said it was time to start talking about tapering, and if there are strong indications of the same in the minutes, it may take a toll on markets.
Wholesale inflation
After the reduction in retail inflation, many believe wholesale inflation will also go down for the month of July. The data is due on Monday. Consensus expects the metric to come out as 11.3 per cent against 12.07 per cent for the last month. However, from equity perspective, some believe it to be a non-event,
Technical outlook
Nifty 50 index touched a new milestone of 16,500 this week in a follow-up buying move, after a consolidation breakout at 15,950 resistance. “Markets in general are trading bullish, in sync with other major global indices. There is good upside potential as long as 16,200 levels are not broken, which is an immediate support on declines. Traders are advised to maintain a bullish outlook going ahead,” said Nirali Shah, Head of Equity Research, Samco Securities.
