US Fed Rate Action, India WPI, Bajaj Housing Finance Debut: The Week Ahead
Indian markets were back to hitting fresh records after a lull, as foreign investors were back buying domestic stocks.
All eyes will be on the US Federal Reserve as the long-awaited interest rate cuts might soon be a reality. This will be the most closely watched event in the upcoming week.
Bajaj Housing Finance Ltd., the hottest initial public offering so far this year, will debut on the national bourses on Monday. The NBFC received bids worth Rs 3.23 lakh crore for its Rs 6,560 crore via the maiden issue.
India's wholesale price index for August will also be closely tracked by traders as they await further cues for markets to rally.
Meanwhile, the Indian markets were back to hitting fresh records after a lull, as foreign investors were back buying domestic stocks. The sentiments were further boosted as India will be the top emerging country to attract inflows when the Fed begins its rate-cut cycle.
Despite volatility, domestic and foreign flows remained positive as a strong monsoon, and expectation of an uptick in demand during the festive season drove investor sentiment, according to Vinod Nair, head of research at Geojit Financial Services Ltd. The market hit a new high as the rate-cut optimism globally (from the ECB and the US Fed) has provided a positive impetus across the global markets, he said.
"Going ahead, market focus will be on the upcoming FOMC meeting next week, while domestic market direction will also be influenced by domestic corporate earnings, which are forecasted to improve in Q2 on a QoQ basis."
Markets Last Week
India's benchmark indices closed the week with the biggest gain since the week ended on June 30. The NSE Nifty 50 ended with gains of 2.03%, and the BSE Sensex closed with a 2.10% rise.
The benchmark gauges ended lower on Friday after seeing record highs in the previous session. This came a day after foreign investors pumped in a record high liquidity to trigger a sudden spike.
Foreign portfolio investors mopped up stocks worth Rs 7,695 crore on Thursday, according to provisional data from the National Stock Exchange.
The Nifty ended 32.40 points or 0.13%, lower at 25,356.50 and the Sensex settled 71.77 points or 0.09%, lower at 82,890.94. Intraday, the Nifty declined as much as 0.38% to 25,292.45, and the Sensex fell 0.37% to 82,653.22.
In the week ended Sept. 13, out of 12 sectors, 11 ended higher and one declined . The Nifty FMCG rose the most and the oil and gas sector declined the most.
Domestic Cues
The major trigger for the markets on the domestic front will be from the wholesale price index for August, which will be released on Sept. 17.
The wholesale inflation in July was the lowest in three months because of a slower price rise invegetables items. The Wholesale Price Index rose 2.04% in July, compared to 3.36% in June. Along with the inflation print,the country's import and export data for August will be out on the same day.
In the state loans on Tuesday, eight states will raise Rs 135 billion via bond sales.
On the political front, India’s northern region of Jammu and Kashmir will hold its first local government elections since being stripped of its autonomy in 2019.
August CPI Data: India's Retail Inflation Remains Near Five-Year Low Despite Marginal Rise Of 3.65%
Global Cues
All eyes will be on the US Federal Reserve's rate decision early Thursday as traders expect a 25 basis points cut given the recent economic prints that came in.
The producer price index in the US picked up slightly in August after the previous month’s numbers were revised lower. This comes after US core consumer prices saw an unexpected uptick in August.
The non-farm payrolls rose in August by 1.42 lakh last month against the expected 1.65 lakh, leaving the three-month average at the lowest since mid-2020.
Federal Reserve Governor Christopher Waller said it’s important for the US central bank to begin cutting interest rates this month but to be “open-minded” about the size of the cut.
Meanwhile, the central banks in Indonesia, Taiwan and Japan will decide on cutting interest rates in the upcoming week. Japan's August trade data will be released on Sept. 18, while Hong Kong's second quarter balance of payment and August inflation will be out on Friday.
Primary Market Action
India's primary market will see a cool-off in the upcoming week after witnessing a record five-session led by the issue of Bajaj Housing Finance Ltd. The week beginning Sept. 16 will see the opening of two mainboard issues along with five others in the SME space.
Non-banking financial services firm Northern Arc Capital Ltd. has set a price band of Rs 249–263 per share for its initial public offering that will open on Monday.
The IPO of the Chennai-based company is a combination of a fresh issue of equity shares valued at Rs 500 crore and an offer for sale of 1.05 crore shares worth Rs 276 crore, according to the red herring prospectus.
Mumbai-based realty player Arkade Developers Ltd. plans to raise up to Rs 410 crore through an initial public offering. The IPO, set to open on Sept. 16, consists completely of a fresh issue of 32,031,250 shares aggregating Rs 410 crore.
Meanwhile, the week will begin with the listing of Bajaj Housing Finance, which became India's hottest public offering. This, along with the scrips of PN Gadgil Jewellers Ltd., Tolins Tyres Ltd., and Kross Ltd., will debut on Sept. 16.
Sodhani Academy of Fintech Enablers Ltd., Excellent Wires and Packaging Ltd., Innomet Advanced Materials Ltd., SPP Polymer Ltd., Trafiksol ITS Technologies Ltd., Aditya Ultra Steel Ltd., Shubhshree Biofuels Energy Ltd., Share Samadhan Ltd., and Gajanand International will list in the SME space.
Corporate Action Ahead
On the corporate front, NMDC Ltd., Mazagon Dock Shipbuilders Ltd., Steel Authority of India Ltd. and the recently listed Popular Vehicles and Services Ltd. will be the big names that have record dates for their interim/final dividend in the coming week.
Shares of Nandan Denim Ltd. and Fedders Holding Ltd. will undergo a stock split from the week starting Sept. 16.
Saksoft Ltd., Mindteck (India) Ltd., and The Phoenix Mills Ltd. will engage in a buyback of shares during the week.
