D-Street Week Ahead: Foreign fund flows, IPO activity and global cues likely to influence market

"Investors would likely take cues from action by global central bankers, the global growth trajectory and the movement in commodities. Back in India, investor focus would likely be on the management commentary of demand and margins in the festive season, the pace of government capex and the trajectory of rural growth," said Shibani Sircar Kurian, Senior EVP and Head-Equity Research at Kotak Mahindra AMC.

With valuations rerated recently, Indian equities are trading at a premium to emerging market historical levels on a relative basis, she pointed out. "This may lead to some near-term consolidation in the market, though we remain constructive over the medium term with growth outlook in India appearing to be relatively stronger than most other economies," Kurian added.

In the holiday-truncated week that ended on September 2, Indian equity benchmarks slipped marginally as losses in IT shares offset gains in auto, FMCG and financial stocks.

As many as 30 stocks in the Nifty50 basket clocked weekly gains.

Bajaj Finserv, Tata Consumer, ITC, Mahindra & Mahindra and Asian Paints were the top gainers.

Titan, Adani Ports, Grasim, Apollo Hospitals and Larsen & Toubro — rising around 3—6 percent — were also among the top blue-chip gainers.

On the other hand, Hindalco, Shree Cement, Infosys, Reliance and ONGC were the top laggards.

Broader indices, however, eked out gains, with the Nifty Midcap 100 clocking its 11th weekly gain in a row.

Foreign institutional investors remained net buyers of Indian shares for the first week after bringing in Rs 22,026 crore in August — the first month of inflows for Dalal Street since September 2021, according to provisional exchange data.

The Nifty50 appears to have major support at 17,000 and continues to face a key hurdle at 17,800, said Ajit Mishra, VP-Research at Religare Broking.

"Banking and financial packs have played a critical role in capping the damage so far and their performance would remain key ahead. We recommend restricting positions to select sectors and stocks that are outperforming the benchmark," he said.

A PMI reading for services activity in India is due on Monday.

Tamilnad Mercantile Bank's IPO to raise up to Rs 832 crore will open for subscription on September 5 and close on September 7. The lender commanded a grey market premium ahead of the share sale.

The stock of Dreamfolks Services, whose IPO worth Rs 562 crore concluded last month with an overall subscription of 56.7 times, will debut on bourses on Tuesday, September 6.