Over the coming week, the market expects the release of key economic data on Q1 GDP growth rate and the Manufacturing and Services PMI. First quarter GDP is expected to show strong growth due to a weak base and a pickup in economic activity towards the end of the quarter. Two IPOs will also keep the primary market buzzing.
Here are the key factors that can guide the markets:
Earlier this week, India will release its official GDP growth rate figures for the June quarter. Analysts expect it to be close to 20 percent, which will be largely due to the weak base from the previous year. But any deviation from expectations can cause the markets to react.
Automotive sales data
Automakers will begin releasing their monthly sales data for August during the next week. With the situation improving and most of the country coming out of lockdown, growth will be watched by investors. The numbers will also highlight how the chip shortage is hampering vehicle production.
Market players will also be waiting for the Purchasing Managers’ Index (PMI), which will reflect demand conditions at the plant level. Consensus estimates show that data from Markit Services will indicate a contraction while data from Markit Manufacturing will indicate an expansion in demand.
Two first public issues are expected to open next week. Specialty chemicals company Ami Organics and diagnostic chain operator Vijaya Diagnostic Center are trying to raise Rs 2,465 crore from September 1-3.
Despite benchmarks hitting new highs, foreign investment flows were dismal during the month. Until last week, foreign portfolio investment in August stood at a mere Rs 986 crore. If REIT investment in the primary market is excluded, total REIT investment for August will be negative.
“The flow of REIT is likely to be influenced by the Fed’s comment. Even then, they are unlikely to incur a lot of new money at these stretched valuations, ”said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Nifty50 closed on a positive note for the week but continued to trade within the range of the previous week. On a daily basis, he created a series of spinning tops and hanging candlesticks which are signs of indecision.
“We can expect a slight dip towards the near-term averages, but the main uptrend will be intact as long as Nifty trades above 16,250 levels. Any breakout below 16,360 support levels will signal weakness. in the short term, ”said Samco Research.