Indian equity market closed higher for second consecutive week with action mostly led by the FOMC meeting outcome. Sensex and Nifty made fresh life highs on the last working day of the week surpassing 84,600 and 25,800 levels respectively and closing the week with gains of 2.0% and 1.7% respectively. Broader markets underperformed with BSE Midcap and Smallcap indices declining 0.2% and 0.1% respectively WoW. In a widely expected
move, Fed Chair slashed benchmark interest rate for the first time since Mar’20 by 50 bps to 4.75% to 5.0%. In a post meeting speech, the Fed Chair said that the jumbo rate cut is on the back of subsiding upside risks to inflation and softening job market while ruling out the possibility of recession. The Fed also cited greater confidence that inflation is nearing the target of 2% and highlighted a further 50 bps rate cut before the 2024 year end and an additional 100 bps cut in 2025. The US weekly jobless claims fell unexpectedly to 2,19,000 vs. the forecast of 2,30,000 for the
week ended Sept. 14 indicating pick-up in jobs growth after the cooling labor market data. On the Indian sectoral indices front, BSE Realty, Bankex and Power indices gained the most for the week by 4.7%/3.5%/3.4% respectively while BSE IT, Oil & Gas and PSU indices fell the most by 2.8%/1.8%/1.4% respectively WoW. The FIIs net bought Rs 3,305 cr while DIIs net sold Rs 634 cr in cash market during the week. Key economic data releases in US next week are flash services PMI, manufacturing PMI & consumer confidence data for the month of Sep'24 and weekly jobless claims, PCE data
for Aug’24. It will be a muted week on the Indian economic data front as no major data release is scheduled except for the flash services and manufacturing PMI for Sep’24. Despite market scaling new life highs, off-late, rally is seen in select heavy weights and broader markets continue to witness profit booking. Investors are recommended to accumulate quality stocks from sectors like Auto, Jewellery, NBFCs, Railway Wagons, Private Banks, Chemicals, Agro Chemicals, etc. with medium to long term investment horizon. Talking about levels, Nifty is likely to test the level of 26,100,
followed by 26,350 in the short-term. While on the downside, the support zone has shifted higher in the zone of 25,500-25,450 in the short-term. |
