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Informist, Friday, Aug 9, 2024

By Anjana Therese Antony

MUMBAI – Investors in the Indian equity market will track updates on the global front for cues next week due to the absence of domestic triggers, analysts said. Market participants have been aggressively tracking developments in global markets, especially since last week after fears of a recession in the US started to loom. 

Data showing a weakening job market last week stoked concerns of a recession in the US. However, the latest unemployment claims, which fell more than anticipated, provided some relief to global investors and led to a rise in foreign equity markets. The data also raised hope that the US Federal Reserve will start cutting key interest rates from September.

"The week was largely dominated by bearish sentiment, but the bulls managed to defend key support levels with conviction. Prices have now entered a corridor of uncertainty, with the next trend not very clear," Rajesh Bhosale, equity technical analyst at Angel One, said in a post-market note. 

Today, the Nifty 50 and Sensex closed over 1% higher each at 24367.50 points and 79705.91 points, respectively. However, both the indices closed lower for the second straight week. The near-term support for the 50-stock index is pegged in the range of 24200-24100 points and resistance at 24500 points. The fear gauge, India VIX, closed nearly 8% lower at 15.3350 after ending higher in the previous session. 

However, analysts said it is premature to conclude whether the worst is behind on the global front, especially after the latest US data. They said investors should wait for more data before aggressively investing in the Indian market as the expensive valuation may lead to losses in case of any negative surprise.

They said foreign investors' increasingly bearish approach towards the domestic market will also be closely monitored. They exited over 36,000 long positions on Thursday and added over 17,000 shorts. The short positions increased to 49% from 43% on Monday, indicating the caution among FIIs. They were net sellers in the cash market for five straight sessions till Thursday. 

With the June quarter corporate earnings season ending next week, investors will continue to track global cues. Some experts said the earnings growth was the slowest in the last seven or eight quarters, but may see some improvement in the quarters to come. This would be aided by a good monsoon, improvement in rural demand, slowdown in inflation, economic growth, and interest rate cuts, analysts said. 

Among specific stocks, SpiceJet will be in focus on Monday as the Delhi High Court will hear a petition by the company challenging a 2018 arbitral award asking the airline and its Chairman and Managing Director Ajay Singh to refund 5.79 bln rupees, along with interest, to its former promoter Kalanithi Maran. The stock closed 0.4% higher at 59.04 rupees on the BSE today. 

On Wednesday, the board of Jindal Saw will consider a stock split. The market will be shut on Thursday on account of Independence Day.  End

Edited by Deepshikha Bhardwaj

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