Stock Market Driving Factors: The release of key macroeconomic figures, monthly derivatives expiry and global cues are likely to drive the stock market’s movement this week, according to analysts.
Markets will also react to comments made by US Federal Reserve Chairman Jerome Powell, they said.
“This week, we expect the market to witness a gradual upward movement with stock-specific performance. The focus will be on the monthly F&O expiry as well as global cues.
“Markets will react on Monday to the US Federal Reserve Chairman’s comments at the Jackson Hole Symposium,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd.
U.S. Federal Reserve Chairman Jerome Powell signaled on Friday that the central bank would cut interest rates at its September meeting.
Powell delivered a crucial speech that laid the groundwork for future interest rate cuts. Powell said: “The time has come for policy to tighten.”
“The market has been expecting an interest rate cut at the Federal Reserve’s next meeting in September. There are signs that rate cuts could occur at a faster pace, especially with the weakening employment data.
“However, Powell believes the chances of the US economy entering recession in the near term are very low. This implies that rate cuts would likely be in line with consensus expectations, and the possibility of higher rate cuts may be lower,” said Naveen Kulkarni, chief investment officer at Axis Securities PMS.
Following the speech by the head of the Federal Reserve, the US markets started their upward movement and closed higher on Friday.
Volatility is expected this week
Traders are anticipating some volatility in the coming sessions due to the monthly F&O expiry scheduled for this week, experts said.
Last week, the benchmark BSE index rose 649.37 points or 0.80 per cent. NSE Nifty also closed with gains of 282 points or 1.1 per cent.
“The Indian market continued its recovery this week, boosted by positive US economic data, which reduced the likelihood of a recession in the country. Also, positive global sentiment over ceasefire talks between Israel and Hamas, along with a drop in crude oil prices, contributed to the recovery,” said Vinod Nair, head of research at Geojit Financial Services.
In institutional activity, foreign institutional investors (FIIs) withdrew Rs 1,608.89 crore worth of equities, however, domestic institutional investors maintained their buying spree, purchasing Rs 13,020.29 crore worth of equities during the previous week.
According to Religare Broking Senior Vice President, Research, Ajit Mishra, domestically, investors will be looking out for economic data releases, including GDP figures and infrastructure output.
India is scheduled to release GDP figures for the first quarter of the current fiscal year on August 30. In addition, infrastructure sector output for July will also be revealed.
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