The week ending September 27 witnessed continued bullish momentum in the stock market, marking the third consecutive week of gains. Key sectors such as Auto, Oil & Gas, Metals, and Pharmaceuticals saw significant appreciation, despite mild selling pressures from Foreign Institutional Investors (FIIs). The Nifty 50 index advanced beyond the 26,000 mark, reaching a new closing high of 26,179—an increase of 388 points or 1.5%. Similarly, the BSE Sensex broke new ground, closing above 85,000 for the first time at 85,572, boosted by a remarkable rise of 1,028 points or 1.2%. In contrast, the Nifty Midcap 100 index edged up by only 0.3%, while the Nifty Smallcap 100 index faced a decline of 0.5%. As we enter a new week, several crucial factors are poised to influence market direction.
Key Influences on Market Movement
US Federal Reserve’s Insights
Global investors are keenly awaiting the speech from US Federal Reserve Chairman Jerome Powell on September 30, especially in light of the recent 50 basis points (bps) interest rate cut made during the September meeting. The Federal Open Market Committee’s ‘dot plot’ suggests an additional 50 bps cut may be in the offing in the next two policy meetings this year, with projections of a further 100 bps cut in 2025. The central bank appears confident that the balance of risks regarding employment and inflation is stable, which adds a layer of optimism to market sentiments.
Monitoring US Economic Indicators
In conjunction with Powell’s speech, other critical data such as monthly job openings and quits from the Job Openings and Labor Turnover Survey (JOLTs), unemployment rates, non-farm payroll figures, vehicle sales, and factory orders will be closely scrutinized.
Global Economic Data Relevance
Investors should also turn their attention to the final figures for Manufacturing and Service PMI for September from key economies including the US, China, Japan, and Europe. These indicators are crucial for understanding global economic health and its effects on local markets.
Oil Price Fluctuations
Market participants will keep a watchful eye on oil prices, especially given escalating geopolitical tensions in the Middle East. The recent death of Hezbollah leader Hassan Nasrallah has heightened concerns. Brent crude futures experienced a notable decline last week, falling 3.66% to $71.95 per barrel. This drop has been attributed to increasing global oil supplies from producers like Saudi Arabia and Libya, overshadowing China’s stimulus efforts aimed at bolstering its economy and concerns about Hurricane Helen. Oil has remained below the crucial $80 per barrel mark since late July.
Domestic Economic Data to Watch
On the home front, attention will shift to the upcoming data releases concerning fiscal deficits and infrastructure output for August, as well as current account and external debt figures for the June 2024 quarter, all due on September 30. In early October, the final data for the manufacturing PMI and services PMI will be unveiled, with preliminary estimates indicating a decline in both indices from the previous month.
Automobile Sales Trends
October 1 will see the release of vehicle sales data by major automobile manufacturers, making this a pivotal period for auto stocks, including Maruti Suzuki, Tata Motors, Ashok Leyland, Hero MotoCorp, Eicher Motors, TVS Motor, Bajaj Auto, and Mahindra & Mahindra. With expectations for increased sales, market movement in this sector will be closely monitored.
Activity of Institutional Investors
Investor sentiment will also be shaped by the activities of Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). Reportedly, FIIs sold shares worth Rs 3,933 crore during the week, although they remained net buyers throughout September with net purchases amounting to Rs 22,404 crore. Meanwhile, DIIs demonstrated strong buying activity, accumulating shares worth Rs 15,962 crore in the last week of September alone, bringing their total investments for the month to Rs 24,212 crore.
Summary of Upcoming Data Releases
| Date | Data/Events |
|---|---|
| September 30 | Fiscal Deficit, Infrastructure Output, Current Account, and External Debt Figures |
| October 1 | Manufacturing PMI Final Data |
| October 4 | Services PMI Final Data, Bank Loan and Deposit Growth Data |
In conclusion, various factors including interest rates, economic indicators, and sector-specific trends will dictate stock market movements in the upcoming week. Investors are advised to remain informed and prepared to capitalize on emerging opportunities.
