The Week Ahead: IPOs, Q1 GDP, Auto sales, among key events Dalal Street investors will focus on next week

The Indian equity market rallied around one and a half percent in the week gone by led by strong gains in metals, energy and IT stocks aided by positive global cues. Both the benchmark indices, Sensex and Nifty hit record highs during the week.

For the week, the S&P BSE Sensex index rose 795.40 points or 1.44 percent and the Nifty climbed 254.70 points or 1.55 percent. The Nifty index ended above 16,700 for the first time.

The broader markets witnessed a recovery and logged their best week in two-and-a-half months. The BSE Midcap index jumped 2.54 percent and Smallcap index rallied 2.04 percent during the week.

“Though the Nifty is inching towards the next milestone of “17,000”, the recent surge lacks decisiveness due to the continuous underperformance of the banking index. We feel it’s prudent to maintain a positive yet cautious approach and choose stocks from the sectors which are trading in sync with the benchmark,” said Ajit Mishra, VP Research, Religare Broking.

According to Mishra, in case of any dip, Nifty would find support at 15,500 and 15,380 levels.

Further, he recommends investors to prefer index majors and other heavyweights as any correction in markets may again derail the recovery midcap and smallcap space.

Going ahead, markets will be initially taking cues from global counterparts, in reaction to the statements made by the US Fed Chair in the Jackson Hole symposium. In line with the latest Fed meeting minutes,  he also signalled the beginning of tapering by the end of this year however sounded flexible on rate hikes.

On the technical front, Nifty on the weekly chart formed a small positive candle with a lower shadow on Friday. This weekly pattern indicates an uptrend continuation pattern in the market after a small range movement.

Also, analysts believe that the market not showing any sharp profit booking after a new high formation on Friday could signal chances of more upside in the short term.

“The lack of strong selling enthusiasm at the new highs has resulted in a range-bound action and small upside breakout of the said range movement. This is a positive indication and there is a possibility of further upside in the short term. The next upside levels to be watched are around 16,900 by next week. immediate support is placed at 16,550 levels,” said Nagaraj Shetti, Technical Research  Analyst, HDFC Securities.

Two companies, Ami Organics and Vijaya Diagnostic Centre, will launch their initial public offerings (IPO) next week.

The Rs 569.63-crore IPO of Ami Organics, a specialty chemical manufacturer, will open for subscription during September 1-3 at a price band of Rs 603-610 per equity share.

Diagnostic chain operator Vijaya Diagnostic Centre plans to raise Rs 1,895.03 crore through the IPO during September 1-3 at a price band of Rs 522-531 per equity share.

The government will release GDP figures for the first quarter of fiscal 2022 on Tuesday, August 31. Economists expect the GDP growth for the quarter to be robust on a lower base and the minimum impact of the second Covid-19 wave on economic activities.

The Reserve Bank of India (RBI), in its latest monetary policy, had projected a GDP growth of 21.4 percent in the first quarter of fiscal 2022. RBI retained real GDP growth forecast for full-year FY22 at 9.5 percent.

The fiscal deficit and infrastructure output for July will also be released on Tuesday.

The Markit Manufacturing PMI for August will be released on Wednesday, September 1, and Markit Services & Composite PMI data on Friday, September 3.

Foreign exchange reserves for the week ended August 27 are to be released on Friday.

The automobile companies will release monthly sales data from Wednesday.

Auto sales recovery is likely to continue in August and going ahead in September as well due to the upcoming festive season.

The foreign institutional investors (FIIs) net sold shares worth Rs 6,833.33 crore in the week gone by. The FIIs have been net sellers throughout the month as they have sold equities worth Rs 7,652.49 crore in August so far.

Meanwhile, domestic institutional investors (DIIs) bought equities worth Rs 6,382.57 crore in the last week. They have been net buyers in the Indian market to the tune of Rs 8,078.24 crore for the month so far.

Pending Home Sales for July on Monday, August 30.

House Price Index for June on Tuesday, August 31.

MBA Mortgage Applications for the week ended August 27; Markit Manufacturing PMI for August, Construction Spending for July on Wednesday, September 1.

Total Vehicle Sales for August; Initial Jobless Claims for the week ended August 28; Factory Orders for July on Thursday, September 2.

Unemployment Rate; Non-Farm Payrolls; Markit Services & Composite PMI for August on Friday, September 3.

Economic Industrial & Services Sentiment for August on Monday, August 30.

Inflation Rate Flash for August on Tuesday, August 31.

Markit Manufacturing PMI for August on Wednesday, September 1.

Markit Services & Composite PMI for August; Retail Sales for July on Friday, September 3.

Retail Sales for July on Monday, August 30.

Unemployment Rate, Industrial Production Preliminary; Housing Strats & Construction Orders for July on Tuesday, August 31.

Jibun Bank Manufacturing PMI for August on Wednesday, September 1.

Jibun Bank Services & Composite PMI for August on Friday, September 3.

Caixin Manufacturing PMI for August on Wednesday, September 1.

Caixin Services & Composite PMI for August on Friday, September 3.