This Week in a nutshell (Sep 13th to Sep 17th)

This Week in a nutshell (Sep 13^th to Sep 17^th)

Technical talks

NIFTY opened the week on 13^th Sep at 17,365 and closed on 17^th Sep at 17,585. During the week, the index hit record highs, gaining 1.2 percent and saw a bullish candle formation on the weekly scale. At the current juncture, support for Nifty is placed at 17,430 and 17,250 zone, while resistance can be seen around 18,111 levels.

On the sectoral front, Nifty Media index outperformed other indices with a gain of over 13 percent and PSU Bank index rose 5 percent. On the other hand, Nifty Metal and Realty indices fell 1 percent each.

Weekly highlights

• The week started with economic data:
  • Consumer Price Index-based Inflation (CPI) for Aug-21 came in at 5.3 percent, compared with 5.6 percent in July-21.
  • Food prices cooled further, especially in the case of vegetable inflation; data released by the National Statistical Office (NSO) showed.
  • Consumer Food Price Inflation (CFPI) for Aug-21 stood at 3.1 percent compared to 3.9 percent in Jul-21. However, concerns remained with high edible oil prices, which registered an increase of 33 percent YoY.
  • The wholesale price-based inflation rose marginally to 11.4 percent in Aug-21, mainly due to higher prices of manufactured goods, even as prices of food articles softened.
  • India’s exports rose by ~45.8 percent YoY to $33.3 bn in August and imports increased by 51.7 percent YoY to $47.1 bn, according to commerce ministry data released on Tuesday.
• An inter-ministerial task force comprising representatives from the Commerce, Railways and Shipping ministries looked to initiate several short-term actions to make more containers available to exporters and cushion prices that have gone up by 200-300 percent YoY.
• With low number of cases and increasing vaccination drives, the economic activities normalised. Domestic air passenger traffic surged 33.8 percent MoM in Aug-21, more than doubled when compared to the same month in the past year, the aviation sector regulator said.
• Finance Minister Nirmala Sitharaman on Thursday announced that the Cabinet has cleared the formation of a ‘bad bank’. The government will guarantee up to Rs 306 bn for security receipts issued by the National Asset Reconstruction Company (NARCL).
• Inflation in India is likely to ease only gradually, Reserve Bank of India Deputy Governor Michael Patra said on Thursday, adding that the outlook on growth and inflation will help determine the future course of monetary policy.
• Positive economic data and government reforms in telecom, banking and automobile sectors helped boost market sentiments. The banking sector, which underperformed till now, came into its own during the week.
• Wall street on the other hand started strongly but lost ground later as economic uncertainties and the increasing likelihood of a corporate tax rate hike dampened investor sentiment and prompted a broad sell-off despite signs of easing inflation.
• US consumer prices rose a lower-than-expected 0.3 percent in Aug-21, the smallest increase in seven months and a hopeful sign that inflation pressures may be cooling.
• Oil prices steadied at the end of the week as the threat to US Gulf crude production from Hurricane Nicholas receded.
• The foreign institutional investors (FII) bought equities worth of Rs 65,455 mn, while domestic institutional investors (DIIs) sold equities worth of Rs 22,925 mn.

Things to watch out for next week

• Nervousness would be seen in the market next week ahead of Federal Reserve and ECB meeting, which could provide some indications on when the central banks will start withdrawing their monetary stimulus and start raising interest rates eventually.
• With weak US job data and inflation increasing at a slower pace, Fed is not expected to hint on taper plans in the upcoming meeting.
• The weak global cues on account of worry over slower economic growth and rising Delta variant cases globally would keep market oscillating between greed and fear.

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