Week Ahead: CPI Inflation, Bajaj Housing Finance IPO, and Global Cues to Drive Sensex & Nifty 50 — Key Market Triggers to Watch

Indian stock markets took a surprising dip last week, even though they had been performing well for 14 consecutive sessions, reaching record highs. This week, all eyes will be on important domestic and global economic data, including inflation reports for both India and the US. Other factors like foreign investments, crude oil prices, and global economic cues will also be watched closely.

Market Recap: Sensex and Nifty 50 Drop

Last week, both the Sensex and Nifty 50 saw their biggest weekly drop in three months, falling by about 1.5%. This ended a three-week winning streak as weak global cues weighed heavily on the market. The fall came after new data from the US raised concerns that the Federal Reserve might have delayed cutting interest rates too long, which could lead to a recession.

At the start of the week, both the Nifty 50 and Sensex hit record highs, but by the end, the Nifty 50 had dropped to 24,852.15, and the Sensex finished at 81,183.19, near their weekly lows.

Sector-Wise Performance

Energy, metals, and auto stocks were the hardest hit last week, with losses between 2.5% and 5%. The midcap index also dropped by over 1%, while small-cap stocks managed to stay relatively flat. The India Volatility Index (VIX), which measures market volatility, rose by 13.63% to 15.21, indicating increased uncertainty.

Focus on Inflation Data and Other Economic Indicators

This week, the release of inflation data for both India and the US will be closely followed, as it could influence market direction. Investors will also keep an eye on other macroeconomic indicators like the Index of Industrial Production (IIP) and Consumer Price Index (CPI), which are set to be released on 12th September. These numbers will give investors more insight into the overall health of the economy and could set the tone for the stock market.

IPO Frenzy: 13 New IPOs and 8 Listings

This week will be busy for the primary markets, with 13 new IPOs opening for subscription. Among them, Bajaj Housing Finance, Tolins Tyres, Kross, and P N Gadgil Jewellers are some of the main IPOs to watch. Several small and medium enterprises (SMEs) will also see action with new listings.

In addition, ongoing IPOs like Shree Tirupati Balajee Agro will close their bidding on 9th September. Some key listings this week include Gala Precision Engineering and Shree Tirupati Balajee Agro, which will debut on the BSE and NSE.

Foreign Investors Remain Active

Foreign institutional investors (FIIs) were net buyers last week, injecting ₹2,430.48 crore into the Indian market. Domestic institutional investors (DIIs) also maintained their buying streak, adding ₹7,442.19 crore to their holdings.

Foreign portfolio investors (FPIs) made a strong comeback, investing ₹10,978 crore in Indian equities in September alone, driven by both domestic and global factors. This was a notable recovery after a three-month period of reduced investments.

Global Cues to Watch

Globally, investors will be monitoring the US job market and inflation data. Weaker-than-expected job data from the US has heightened fears of a potential recession, which could influence the Federal Reserve’s decision on interest rates.

Oil Prices and Geopolitical Developments

Crude oil prices saw a significant decline last week due to concerns about oversupply, with Brent crude dropping to its lowest level since December 2021. OPEC+ decided to pause its planned oil output increase, which had a stabilising effect, but oil prices still ended the week down.

Key Technical Levels for Nifty 50 and Bank Nifty

Technically, Nifty 50 saw signs of weakness last week, closing below its short-term 20-day exponential moving average (DEMA). Experts suggest that the next support level could be around 24,500, while the 25,100-25,350 range will act as a key resistance zone in case of a recovery.

For Bank Nifty, strong selling pressure pushed the index below the 50,800 mark. The next key support level is at 50,500, with a potential further drop to 49,800 if the selling continues.

In conclusion, this week will be crucial for both domestic and global markets as investors focus on inflation data, IPO action, and global economic cues. Defensive stocks like FMCG and pharma are expected to remain stable, while other sectors could face more volatility.