FII Action, Global Cues, and IPO: 6 Key Drivers to Watch on D-Street This Week

The Nifty ended last week with a 1.6% gain, hitting record highs on three occasions, driven by strong performances in IT and pharma stocks. As trading resumes on Monday, several important domestic and global events are expected to influence the markets.

Nifty’s Historic Streak

Last week, Nifty made a historic move by marking its 13th consecutive week of gains—a streak not seen in 31 years. For the first time, Nifty closed comfortably above the 25,000 mark. Despite starting August with uncertainty, the month ended on a high note. Santosh Meena, Head of Research at Swastika Investmart, attributed the bullish momentum to the growing expectation of a rate cut in the US this month. He also pointed out that foreign institutional investors (FIIs) have been net buyers of Indian equities, supported by strong domestic liquidity.

Global Markets

Global market trends, especially from the US, will likely remain a dominant force this week. On Friday, Wall Street’s major indices closed with strong gains, supported by positive economic data that strengthened expectations for a rate cut in September.

Rupee vs. Dollar

The Indian rupee ended nearly flat on Friday, closing at 83.8625 against the US dollar. While most Asian currencies rallied between 2% and 6% in August, the rupee weakened by 0.2%, marking its second consecutive monthly decline. Dilip Parmar, a foreign exchange research analyst at HDFC Securities, noted that while the rupee’s bias is slightly positive, it is unlikely to rise above 83.70 in the near term.

Corporate Action

Companies like Ircon International, Deepak Fertilizers, and Sapphire Foods are likely to be in focus this week as they approach their record dates for dividends, bonus issues, rights issues, and stock splits. The record date is the deadline by which shareholders must hold their shares in their Demat account to qualify for these corporate actions.

Technical Factors

Sectoral rotation is helping Nifty maintain its elevated levels. Last week, IT and pharma indices drove Nifty to healthy gains. Jatin Gedia, Technical Research Analyst at Sharekhan, expects Nifty to target levels of 25,500 on the upside. On the downside, the crucial support is at 25,000 to 24,900. He recommends continuing to ride the uptrend with a trailing stop-loss mechanism.

FII/DII Action

On Friday, FIIs were net buyers with purchases amounting to Rs 5,318.14 crore, while domestic institutional investors (DIIs) were also net buyers with purchases totaling Rs 3,198.07 crore.

IPO Action

Two companies are set to launch their IPOs this week. Gala Precision Engineering will open its public offer in the mainboard segment, while Jeyyam Global Foods will introduce its IPO in the SME space. Additionally, the market will see 11 listings, including Premier Energies and Ecos Mobility, which received strong responses to their IPOs last week.

Crude Oil

Oil prices will remain critical for markets due to their impact on inflation and the monetary policies of global central banks, including India’s.

Global Economic Data

This week, the US will release data on ISM Non-Manufacturing New Orders (August), ISM Non-Manufacturing PMI (August), ISM Non-Manufacturing Prices (August), and initial jobless claims. In the Eurozone, the HCOB Eurozone Manufacturing PMI for August will be released.

These factors will play a significant role in steering the markets this week, so investors should keep a close watch.