Oil price, Greenback volatility to steer mkts

Buoyed by healthy macroeconomic numbers including June quarter GDP numbers, manufacturing PMI scaling a three-month high of 58.6, auto sales for August zooming to record highs and August GST collections; the domestic stock markets posted positive gains after trading in the red for five straight weeks. BSE Sensex jumped over 500 points to 65,387 and NSE Nifty climbed 170 points to 19,435 points. The broader markets continued their outperformance, with the Nifty Midcap-100 and Smallcap-100 indices rising 2.5 percent and 4.4 percent respectively.

FIIs were net sellers in August to the tune of Rs20,621 crore in the cash segment, after significant buying in previous three months. On the contrary, DIIs compensated the FII outflow by buying shares to the tune of over Rs25,000 crore in August. FIIs can turn net buyers in India if the US Fed does not hike interest rates in the upcoming monetary policy, with the latest jobs report from the US indicating slowness in the US economy.

The rupee was down slightly against dollar week on week. In the previous week, the rupee failed to capitalise on the weakness in the dollar index amid persistent demand from importers.

The movement of crude oil prices is likely to impact the economies and thereby, the stock markets. Brent crude futures gained more than 5.5 percent to $88.99 a barrel and WTI crude oil jumped 7.5 percent to $86 a barrel. Expect the market to trade in a range with sector- and stock-specific actions as the broader market momentum remains positive.

The primary market will see three companies in the mainboard segment launching their IPOs worth Rs1,350 crore.

Stainless steel-based products maker Ratnaveer Precision Engineering, healthcare services provider Jupiter Life Line Hospitals and EMS. In the SME segment, Mumbai-based bulk packaging solutions provider Kahan Packaging, Sahaj Fashions,Mono Pharmacareand CPS Shapers will open their public issues coming week.

F&O / SECTOR WATCH

On the back of good macroeconomic data and short covering; the settlement week witnessed record volumes in the derivatives segment. Nifty closed in green after five consecutive losses on weekly chart.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)