Market Week Ahead: N Korea, macro data among top factors to guide D-St

Fears that Kim Jong-un-led North Korea may launch ICBM missile anytime soon restricted investors across the globe from entering the market, thus pushing them to safe havens like gold. NEW DELHI: The domestic equity market witnessed rangebound trade throughout the week gone by owing to mixed global cues and the North Korean crisis.

Fears that Kim Jong-un-led North Korea may launch ICBM missile anytime soon restricted investors across the globe from entering the market, thus pushing them to safe havens like gold.

On Friday, the S&P BSE Sensex closed 25 points higher at 31,687 while the broader Nifty50 index ended at 9,935, just 5 points higher with 17 constituents ending in the green and 34 in the red.

On a weekly basis (Sept 1- Sept 8), the 30-share pack lost 0.64 per cent while Nifty shed 0.39 per cent.

Here’s a look at the top factors that may influence market in the coming week —

North Korea crisis
The biggest determinant of the financial markets movement across the world will be what North Korea does next. According to reports, the nation is preparing to launch an ICBM (intercontinental ballistic missile) at full range on Saturday. South Korean media reported that a North Korean ICBM was on the move. Investors appear to be sitting on the edge with a keen eye on Pyongyang’s activities. Any further escalation is bound to rattle financial markets the world over.

IIP data for July
The government will release industrial production data for July on September 12, 2017 (Tuesday) post market hours. The growth rate of industrial output, measured by the Index of Industrial Production (IIP), slumped to 1.7 per cent in May from 8 per cent expansion in the same month last year.

Inflation numbers
Inflation numbers are also slated to release next week. Inflation data based on consumer price index (CPI) for August will be out on September 12 after market hours. Retail inflation jumped to 2.36 per cent in July on a yearly basis after easing for three straight months.

In addition, WPI (wholesale price index) based inflation numbers for August will be released on Thursday, September 14, 2017. Wholesale inflation rose to 1.88 per cent in July as prices of some commodities increased in the first month of Goods and Services Tax (GST) rollout. Inflation based on the wholesale price index (WPI) was 0.90 per cent in June 2017 and 0.63 per cent in July 2016.

GST Council meet
The GST Council on Saturday did not raise the cess on the auto industry as much as it was expected to, lowered rates on 40 items of daily use, extended the date for filing returns and set up a panel of ministers to monitor issues faced by the GST network. The council, which met in the capital of Telangana on Saturday for nearly eight hours, softened the blow on the car industry by introducing only a part of the 10% cess on automobiles and imposing it in a graded manner. Related stocks and sectors will react to the decisions when trading resumes on Monday.

IPO mart gets busy
It’s raining IPOs these days! After two successful IPOs of Dixon Technologies and Bharat Road Network during the week, three more public offerings are slated to hit D-Street next week. The initial public offering (IPO) of Matrimony.com, which runs online matchmaking business under BharatMatrimony brand, is all set to hit the market on September 11. The size of the proposed IPO is projected at Rs 500 crore. The offer will close on September 13.

Realty firm Capacit’s Infraprojects is also coming up with an initial public offering (IPO) with total issue size aggregating up to Rs 400 crore. The price band of the IPO has been fixed at Rs 245 to Rs 250 per share. The IPO shall open on Wednesday, 13 September 2017 and will close on Friday, 15 September 2017.

This apart, the much-talked about IPO of ICICI Bank’s general insurance arm ICCI Lombard will open on September 15 (Friday) and close on September 19. The price band has been fixed at Rs 651 to Rs 661 per share.

Tech charts do not give a rosy picture
The Nifty50 formed a ‘Hanging Man’ pattern on the weekly charts on Friday, suggesting indecisiveness among the market participants. The index traded rangebound through the week, but could not breach the intraday range between the 9,861 and 9,988 levels seen on Monday in last four sessions.
“In the absence of a buy signal on the critical momentum oscillators, it will be difficult to anticipate when this market breaks out. We advise traders to remain cautious and initiate longs only when the index firmly trades above the 9,988 level. The upside looks capped at 10,088,” said Mazhar Mohammad, Chief Strategist for Technical Research & Trading Advisory at Chartviewindia.in.

Bank of England policy meet
The Bank of England is scheduled to hold its next monetary policy meeting in the coming week with a decision due on Thursday (September 14). Although, the bank is expected to maintain status quo on policy rates, there are chances it could present a shift in its tone. “While there is zero chance of any policy action at this meeting, the thrust of the minutes and the vote could yet spring some surprises,” Alan Clarke, an economist at Scotiabank was quoted as saying by Bloomberg. Recent news “has been mildly hawk-friendly,” he said.

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