Indian stock market next week- Key factors likely to affect
Indian stock market gained more than 1.5 percent during the week ended 24 Sept. The broader markets underperformed in comparison with the benchmark indices. Indian markets started with a heavy sell-off on Monday due to weak global cues but rebounded in the mid of the week.
The reason for the heavy sell-off in the Indian markets is due to the concerns about debt-ridden China’s property developers Evergrande and some cautiousness ahead of the Fed’s meeting. However, markets bounced back and recovered all weekly losses in the mid of the week after clarity from Federal Reserve and interest repayment assurance from the Evergrande group.
Factors that may impact the Indian stock market next week
Macroeconomic data
Last week, there was no major economic data released and the markets were dominated by the global cues only. In the coming week, markets will have infrastructure output data, Manufacturing PMI data, and current account data. These data are expected to be better as compared to the previous month. The complete schedule for the next week’s macroeconomic data is given below.
| Economic Data Next Week | |
| 30 Sept 2021 | Infrastructure Output Aug |
| 30 Sept 2021 | Govt Budget value |
| 30 Sept 2021 | Current Account & External Debt |
| 01 Oct 2021 | Markit Manufacturing PMI |
| 01 Oct 2021 | Foreign Exchange Reserve |
Auto Sales Numbers
According to India Rating and Research (Ind-Ra) report, the semiconductor shortage will further impact the sales volume of passenger vehicles in the month of September. A global supply chain shortage of semiconductors has badly impacted automobile production.
In the month of August, there was an improvement in consumer demand and auto sales volume due to the festive season and continuous decline in covid cases. Traders having positions in the auto sector need to be cautious later this week as auto sales numbers for September are expected on 1st October.
Monthly F&O Expiry
The monthly F&O expiry is scheduled for 30th September and the week is expected to remain volatile. Traders can follow our daily Nifty and Bank Nifty predictions and trends.
Global market cues
Last week global markets were volatile due to the concerns about China’s property developer Evergrande’s debt crisis and Federal Reserve’s meeting outcome. In the coming week, market sentiments will be hit by ongoing concerns of Evergrande’s and the macroeconomic data that are scheduled in the next week.
Evergrande debt crisis
Chinese property developer Evergrande missed the deadline Thursday on interest payments of $83.5 million to offshore bondholders. The developer group has 30 days grace period during which it can still make payments but fears have increased about the company’s capacity to manage its $305 billion total debt.
The company didn’t issue any statement after the 1st deadline passed for making interest payments to bondholders. The property developer will be facing another $47.5 million payments on its debt in the coming week. Globally the stock markets are expected to remain volatile on this ongoing debt crisis and Indian stock markets may follow the trend. On Friday, the Hang Seng index was down 1.3 percent and Shanghai was down by 0.80 percent.
Macroeconomic data
The important macroeconomic data like GDP, PMI data of several countries are expected in the next week. The economic data in the US, Europe may remain subdued due to the surge in delta variants and its restrictions in the region during the last few months. The schedule for the important macroeconomic data for next week is given below.
| Important Global Macro Data Next Week | ||
| 30 Sept 2021 | Retail Sales MoM Aug | Japan |
| 30 Sept 2021 | Industrial Production Prel Aug | Japan |
| 30 Sept 2021 | NBS Manfg & Non Manufg PMI SEP | China |
| 30 Sept 2021 | Caixin Manufacturing PMI SEP | China |
| 30 Sept 2021 | Current Account | GB |
| 30 Sept 2021 | GDP Growth Q2 | GB |
| 30 Sept 2021 | GDP Growth Q2 | US |
| 30 Sept 2021 | Initial Jobless claim | US |
| 30 Sept 2021 | Core PCE Price Q2 | US |
| 01 Oct 2021 | Unemployment rate | Japan |
| 01 Oct 2021 | Thankan Manfg & Non Manfg Index Q3 | Japan |
| 01 Oct 2021 | Jibun Bank Manufacturing PMI SEP | Japan |
| 01 Oct 2021 | Consumer confidence SEP | Japan |
| 01 Oct 2021 | Markit/ CIPS Manufacturing PMI SEP | GB |
| 01 Oct 2021 | Markit Manufacturing PMI SEP | US |
FII & DIIs investment in Indian stock market
Foreign Institutional Investors (FIIs) were the net sellers and the Domestic Institutional Investors (DIIs) were the net buyers in the cash market segments over the week ended 24 September. FIIs sold only Rs 8.38 crores while DIIs bought Rs 3048.3 crore in the cash market segment during the week.
On a monthly basis, FIIs and DIIs both are net buyers in the cash segment. FIIs are bullish on Indian markets for much of 2021 so far, net offloading only in April, May, and July. As per market experts, strong economic recovery and easing concerns about covid cases cements India’s position as a preferred investment destination for FIIs.
Coronavirus risk & Vaccination
India’s daily covid cases declined for the fourth consecutive day. India reported 28171 new covid cases on Saturday. It has declined from the week’s high of 32028 recorded last Wednesday. India has administered more than 85 crore coronavirus vaccination so far, more than 60% of India’s population are now covered the first dose of the Covid vaccine.
Though coronavirus infection is declining in India, it is not yet over. Some countries have seen an increase in new cases in the last 10 days like China, Singapore, Russia, Canada, Brazil, Australia, and others. So traders need to be alert on this front, any negative news can affect the market sentiments.
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Weekly Stock Market Indexes & Analysis (20 – 24 Sept)
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Editor’s Desk
