Growth data, derivatives expiry to influence equity markets

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Macro-economic data points, especially the country’s quarterly economic growth figures, along with derivatives expiry are expected to influence the movement of equity indices next week.

According to market observers, investors’ risk-taking appetite will also depend upon global cues, direction of foreign funds movement and any further development over divestment and consolidation of public sector undertakings.

“Main data points such as the ECI, quarterly GDP growth rate and fiscal deficit will have a major bearing on the equity markets,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told.

“Apart from official data releases, automobile sales figures for August and stock-specific developments will continue to influence the equity markets.”

The Ministry of Commerce and Industry will release the Index of ECI (eight core industries) figures for August 2017. This will be followed by the release of the country’s fiscal deficit and quarterly estimates of GDP growth for the first quarter of 2017-18.

Subsequently, the monthly automobile sales figures and the Purchasing Managers’ Index (PMI) manufacturing data will be released on September 1.

In addition to key data points, derivatives expiry on August 31, Thursday, will be the other major theme for the week, even as volatility is expected to flare up on account of foreign funds outflows. This might even impact the Indian rupee.

Last week’s provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) sold stocks worth Rs 4,666.53 crore, while DIIs bought scrip worth Rs 2,883.99 crore during August 21-24.

Similarly, the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 5,281.52 crore, or $824.17 million, during the trade week ended August 24.

“Short-term volatility can be high as the stock market remains choppy. Next week traders will focus on US jobs data,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS, adding that a rupee range of 63.80-64.20 to a US dollar can be expected next week.

The Indian rupee had strengthened by 11 paise to close the last week at 64.03-04 to a US dollar from its previous week’s close at 64.14.

On technical levels, the NSE Nifty is expected to continue on its upward trajectory after crossing the immediate resistance level of 9,950 points.

“Technically, Nifty showing minor upmove in the (last) week after a strong week earlier represents consolidation,” elaborated Deepak Jasani, Head of Retail Research for HDFC Securities.

“Hence, Nifty has to move, sustain above 9,950 points levels to witness further upmoves. The immediate support is at 9,750 points levels.”

Last week, key equity indices closed on a flat-to-positive note on the back of short covering and influx of domestic funds.

Consequently, the 30-scrip Sensitive Index (Sensex) of the BSE rose 71.38 points or 0.99 per cent to 31,596.06 points.

The NSE Nifty50 inched-up by just 19.65 points or 0.2 per cent to close the week’s trade at 9,857.05 points.