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Global cues to steer market direction
With US dollar index above 105 mark and the US bond yields at 4.3%, market players do not expect much buying from FIIs in near term
Buoyed by good macro-economic data like strong industrial output for July, modest fall in August inflation, decline in core inflation in the US, and the European Central Bank (ECB) hints at a halt in rate hikes; the domestic stock markets ended the week on strong footing hitting new all-time highs. BSE Sensex climbed 1,240 points or 1.9 per cent to 67,839 and NSE Nifty rose 372 points or 1.9 per cent to 20,192 points. However, the renewed surge in trading triggered a wave of profit-booking in the broader markets amid rising concerns over valuation, pushing the Nifty Mid-cap and Small-cap indices down 0.4 percent and 0.14 per cent. Sectorally, auto, banking, financials, technology and pharma witnessed good buying interest.
FIIs remained net sellers during the week ended too with sales of Rs9,580 crore till date in September. However, this did not impact the market momentum as DIIs bought over Rs10,000 crore worth shares during the month. With US dollar index above 105 mark and the US bond yields at 4.3 percent, market players do not expect much buying from FIIs in near term. With international crude oil prices jumping to a 10-month high, market participants will keep an eye on the oil rates as India is a net oil importer and any major spike in prices from here on may impact the sentiment. In the coming week, the key factor to watch out would be the outcome of two-day US Fed meeting followed by US economic projections. Observers feel that the US Fed may decide to pause interest rate hikes in the September meeting and may keep Fed funds rate in the range of 5.25-5.5 percent, but indicate a chance of hike in November or December meeting. The five-day special session of Parliament is all set to commence from Monday, September 18. Any dramatic surprise resolutions may trigger volatility in the markets. IPO market continues to sizzle with several IPOs opening for subscription.
Sai Silks Kalamandir, Signatureglobal India, Vaibhav Jewellers, Samhi Hotels, Zaggle Prepaid Ocean Services and Yatra Online are making offers. Taking advantage of irrational exuberance in SME and Emerge segments, many unknown companies are making the initial public offerings. Some of them are Hi-Green Carbon, Mangalam Alloys, Marco Cables & Conductors, Organic Recycling Systems, Madhusudan Masala, Techknowgreen Solutions, Master Components, Holmarc Opto-Mechatronics, Cellecor Gadgets, and Kody Technolab IPOs.
(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)
STOCK PICKS
Kirloskar Ferrous Industries Ltd is engaged in the business of pig iron and iron castings. The company specializes in producing custom grey iron castings for original equipment manufacturers and tier-I suppliers. The Company’s subsidiary, ISMT Limited, is engaged in manufacturing of seamless tubes, cylinder tubes, components and engineering steels.
