This Week in a nutshell (Aug 23rd to Aug 27th)

This Week in a nutshell (Aug 23^rd to Aug 27^th)

Technical talks

NIFTY opened the week on 23^rd Aug at 16,450 and closed on 27^th Aug at 16,705. This is the highest closing ever for the index. The index made a weekly gain of 2.9%. On the technical front, 16,650 will act as immediate support and if this level is broken, the Nifty may slide to 16,575-16,500 levels. On the upper side, 16,780 will act as a hurdle. Once the level is breached, the Nifty can move to 16,840-16,900 levels.

Weekly highlights

• Dalal Street rose to record closing highs on Friday, weekly gains were led by IT (+2.9%), Financial Services (+2.1%) and Pharma sector (1.7%).
• The midcap index logged its best week in two-and-a-half months. However, weakness in auto sector played spoilsport, keeping the upside in check.
• The US Food and Drug Administration’s full approval to Pfizer and BioNTech’s coronavirus vaccine rekindled hope and optimism about a quicker recovery from a slowdown caused by the pandemic.
• Renewed tensions between China and the US, the fear of a rise in the number of Covid-19 Delta variant infections, suicide attacks at the Kabul airport in Afghanistan that killed at least 12 US service members and scores of Afghans and the US central bankers’ annual symposium kept investors cautious around the globe.
• As the trading week ended, Indian market participants and analysts keenly awaited updates from the annual Jackson Hole symposium in Wyoming for more clarity on the US monetary policy going forward.
• S. Fed Chair Jerome Powell’s wait-and-see approach in a much-anticipated address on Friday gave US investors and market participants some reassurance that the central bank’s extraordinary efforts to prop up the economy were likely to support riskier assets a while longer.
• US Stocks gained ground after the release of the text of Powell’s speech, with the benchmark S&P 500 index hitting a record high, while the lack of any new hints on when the U.S. central bank is likely to begin paring bond purchases led Treasury bond yields and the U.S. dollar lower.
• The foreign institutional investors (FII) sold equities worth Rs 68,333 mn, while domestic institutional investors (DIIs) bought equities worth Rs 63,826 crore. So far in August, FIIs have sold equities worth Rs 76,525 mn and DIIs have bought equities worth Rs 80,782 mn.

Things to watch out for next week

• Indian Markets – Indian investors are likely to react to the statement made by the US Federal Reserve Chairman Jerome Powell in the Jackson Hole symposium in which he has also hinted about tapering by end of CY21. Investors will also eye 1QFY22 GDP print, auto sales numbers and global cues in coming week.
• US Markets – Markets will keep an eye on a window into how the Delta variant has rippled through the economy, with the release of the U.S. jobs report for the month of Aug-21, following recent weak readings on consumer sentiment and retail sales. The seven-day average of new reported cases reached about 155,000, the highest in about seven months, Reuters data through Thursday showed.

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