Mumbai (Maharashtra) [India], August 10 : The stock market in the upcoming week will be looking at global happenings such as international market performance, anticipations of recession in the US, and domestic macroeconomic indicators such as IIP, CPI, and WPI inflation data, said market analysts.
The market will be closely looking at the conclusion of the earnings season next week.
"Looking ahead, focus will be on global market performance, especially in the US, for directional cue," Ajit Mishra, SVP, Research, Religare Broking Ltd.
"Domestically, attention will also be on the conclusion of the earnings season and key macroeconomic indicators such as IIP, CPI, and WPI inflation data," he added.
Expressing trust in the Indian markets, Vinnaayak Mehta, Founder and Managing Partner, The Infinity Group said, "While global factors may induce short-term volatility, the resilience of the Indian market provides a promising outlook for patient investors committed to long-term growth."
The stock markets experienced heightened volatility and closed lower for the second consecutive week on August 9.
Indian markets experienced one of the worst falls on closing of Monday trading with both the indices Nifty, and Sensex registering high losses during the opening trade. The markets followed the global bloodbath on August 5 but rebounded in the coming trading days.
Concerns over a potential US recession and escalating tensions in the Middle East triggered a sharp downturn on Monday, marked by a gap down opening in the indices.
The market in the subsequent sessions maintained a cautious mood, albeit with some stability in global markets which stopped further downside. Ultimately, both benchmark indices, Nifty and Sensex, fell approximately one and a half per cent each, settling at 24,367.50 and 79,705.91 respectively on Friday closing.
Most sectors, excluding defensive sectors like pharma and FMCG, faced selling pressure, with metal, energy, and financial sectors emerging as the top losers.
This trend extended to midcap and smallcap indices, which registered losses ranging from 1 per cent to 2 per cent.
The market analysts say that the Nifty index has been consolidating within its short-term moving averages (20 DEMA and 50 DEMA) in the 24,000-24,400 range, and a decisive breakout from this zone will likely determine the next directional move.
"If a breakout occurs, the index could advance towards 24,700 to fill the gap on the daily chart. On the downside, key support is positioned between 23,450-23,700 in the event of further declines," Mishra further added.
However, the experts suggest that traders should manage positions cautiously on both sides, with a strong emphasis on overnight risk management, given the mixed trends across sectors.
In the current market scenario, the Foreign Portfolio Investors (FPIs) turned net sellers in the Indian stock market, offloading equities worth Rs 12,404.73 crore during the week of August 5 to 9.
According to data from the National Securities Depository Limited (NSDL), FPIs sold equities every day of the week except Friday when they bought stocks worth Rs 521 crore.
Interestingly, at a time when overseas investors were net sellers in Indian equities, domestic institutional investors remained net buyers, largely compensating for the outflows by foreign investors. According to NSE data, the net gross purchase by domestic investors (DIIs) in August stands at Rs 23,500.01 crore.
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