Developments surrounding North Korea, oil prices and a host of other domestic factors could move the market.
Friday saw another day of consolidation as equity benchmarks ended flat amid rising geopolitical tensions after North Korea launched another missile that flew over Japan.
The 30-share BSE Sensex was up 30.68 points at 32,272.61 and the 50-share NSE Nifty fell 1.20 points to 10,085.40.
The market managed to recover in last hour of trade as the Nifty clawed back above 10,100 level but failed to hold those gains.
The consolidation around this psychological 10,100 level indicated that the market may be preparing to cross previous record high of 10,137 (hit on August 2), experts said. The new high may be possible in the second fortnight of this month, they feel.
"Global cues are currently dictating our market trend and it becomes difficult to trade in such scenario due to excessive volatility," Jayant Manglik, President, Retail Distribution, Religare Securities said.
The week was very strong for the market as the Sensex gained 1.8 percent and the Nifty rose 1.5 percent while Nifty Midcap rallied more than 2 percent.
Banks, FMCG and healthcare stocks saw selling pressure while technology stocks, and select auto & metals stocks gained strength.
The Nifty IT index outperformed all indexes, up 1 percent on buying in leading stocks. Infosys rallied 1.8 percent followed by TCS, HCL Technologies, Tech Mahindra and Wipro with around 0.7 percent loss.
Going forward, geopolitical activities surrounding North Korea, oil prices and a host of other domestic factors could move the market. Here’s a look at what is in store next week.
“Moreover, as we come close to the end of Q2FY17, the focus in the next few weeks will shift towards recovery in corporate earnings...Another key factor to watch out for would be the recovery in rural demand which has been muted thus far. On a regional basis, most of India was in normal to a somewhat deficient territory with parts of central India and north India remaining deficient. Boosting rural demand has been a target area for many government schemes," Shibani Kurian, Sr. Vice President and Head of Equity Research, Kotak
The Street will closely look at the data released by weather authorities such as the India Meteorological Department (IMD) and entities such as Skymet.
As per a report by Kotak Institutional Equities, the as of September 13, rainfall has been 6 percent below normal, with weekly rainfall being 31.4 percent below normal. This could be taken note of by investors who had placed their bets on good monsoon to be a driver for rural, agri and consumer stocks. They had seen a rally since May when the first forecast reports were out.
“On a regional cumulative basis, most of India was in deficient to normal rainfall with parts of central India and north India remaining deficient,” the firm said in its report.
In fact, Skymetweather.com reported that as on September 14, Maharashtra is rain deficient by 4 percent. Looking at the sub-divisions, Konkan and Goa and Marathwada have witnessed normal rains, while Vidarbha region is the most deficient with 27 percent and Madhya Maharashtra by 16 percent.
With a flurry of IPOs hitting the primary market, a few more listings will be seen this week. Dixon Technologies, Bharat Road Network and Matrimony.com will be listed on the exchanges in the coming week, which the Street could take cues from.
Consumer electronics manufacturer Dixon Technologies and road BOT company Bharat Road Network are set to debut on exchanges on September 18. The former has fixed issue price at Rs 1,766 per share and the latter has set it at Rs 205 per share, the higher end of price band. Both IPOs closed on September 8.
Apart from these two, Matrimony.com will be listed on the exchanges on Thursday (September 21, 2017). The initial public offer (IPO) of Matrimony.com, which runs online match-making portals, was oversubscribed 4.41 times so far on the last day of bidding.
One major entity will also hit the primary market in the coming week. SBI Life Insurance, a subsidiary of the country's largest lender SBI, will hit the capital market on September 20 to raise up to Rs 8,400 crore.
This would be the second listing of a life insurer after ICICI Prudential Life Insurance, which went public last year. The price band will be Rs 685-700 per equity share with a discount to eligible employees of Rs 68 per share on the offer price.
Bids can be made for a minimum of 21 equity shares and in multiples of 21 equity shares thereafter, they said. The equity shares will be listed on the BSE and the NSE, they added.
Among small and medium enterprises (SME), eight other IPOs will be on offer for investors. Companies such as Prataap Snacks, RM Drip and Sprinklers Systems, Madhya Pradesh Today Media, among others, will hit the Street.
Stocks in focus
Quite a few pharmaceutical companies could be in focus on the back of developments involving the regulator, US Food and Drug Administration (FDA).
Cadila could be on the radar of investors after Zydus’ Nesher Pharma received a final approval from the US regulator for Oseltamivir powder, a drug used to treat flu. Zydus also received two other approvals for marketing Modafinil Tablets, a drug used to cure extreme sleepiness during narcolepsy and sleep disorders. Along with this, the company received an approval for Solifenacin Succinate Tablets, which is used to treat an overactive bladder.
Additionally, Dr Reddy’s Laboratories has received three observations after the completion of audit of its Mirfield plant I UK by the US FDA. The company said that it is working on the said observations.
Meanwhile, Laurus Labs could also be on the radar after US FDA issued an establishment inspection report for its Unit-2 in Vizag. The German regulator too has completed an inspection at the same unit.
Religare Enterprises could also be in focus after the National Company Law Tribunal (NCLT) refused to stay its investment of Rs 500 crore in its capital markets subsidiary.
Over 300 companies will be conducting their annual general meetings, which would also see some discussion on the dividend issue by the companies. Among them, a few names include, Indraprastha Gas, Phoenix, Ruby Mills, Shemaroo, DLF, SMS Pharma, and Mirza International, among others.
Additionally, companies such as Gujarat Apollo Industries could be in focus ahead of their buyback decision that could be taken in the Board meeting called on September 19. Tata Elxsi could be in focus as the company goes ex-date of its bonus on Monday. Private banking giant, Yes Bank, could also react to the stock split event on September 21, where the stock will be split from a face value of Rs 10 to Rs 2 per share.
Over the past week, the Nifty managed to hold on to 10,000-mark, amid volatile geopolitical climate. Market experts believe that such a move next week could mean a positive cue for the Street as well, but a decline could put some pressure on the overall trajectory going forward.
"Nifty as per smaller and larger timeframe is still holding below the key hurdles and there is a possibility of further upmove and a formation of new all-time high in coming weeks. Maximum upside levels to be watched for next week could be around 10150-180 levels, but there is an equal chance of Nifty showing top reversal pattern at the highs, in the next 1-2 weeks," HDFC Securities said in its report.
On September 15, foreign institutional investors (FIIs) bought shares worth Rs 418.86 crore, compared to domestic institutional investors (DIIs), who bought shares worth Rs 125.55 crore in the Indian equity market on Friday.
As we pass the first half of this month, FIIs have been net sellers of around Rs 7,600 crore worth of shares, while DIIs have purchased around Rs 5770 crore worth of shares in this month.
In the US, Markit Composite, manufacturing and Services PMI data for September 2017 will be unveiled on Friday. Also, In Europe, manufacturing and services PMI releases from France, Germany, and the Eurozone as a whole will be released on Friday.
Among other things, India is set to release its current account data for the second quarter, while Europe and US will declare its CPI numbers and the housing market index. Along with it, US will also announce crude oil inventory data, while the
Bank of Japan will hold its monetary policy meeting. There could be announcements on rate action front there.
The market here could look out for cues from the meeting of Federal Open Market Committee meeting. The US central bank could start cutting its balance sheet, but rate hike expectations are nil for this meeting.
"The Fed's tone and stance during next week's FOMC statement and press conference will play a major role in setting expectations for interest rates, the Fed's balance sheet reduction plans, and the U.S. dollar going forward," said James Chen, head of research at Forex.com in Bedminster, New Jersey, reported CNBC.
The Street could keep a track of geopolitical movements as well. Over the past week, there were active developments on the North Korean front, which kept the market on its feet. In fact, the rogue nation’s leader also fired a missile which flew over Japan, leading to some panic in the market.
Such tensions do not look like they will ebb for a while. War of words between different leaders continue and any other retaliation from either of the countries involved in the conflict could further spook the markets. Having said that, experts also said that the impact on the market is also getting lighter.Market expert Ambareesh Baliga also pointed out that Germany’s Federal elections slated will be held on Sunday, September 24. The event will select the member of the government which will have ramifications on who will get elected as German Chancellor.