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Can Nifty break 17k? Experts on how market action could be next week

In the coming week, global cues, Q1 GDP numbers, COVID-related news flow and auto sales numbers of August will have their say in the market.

August 29, 2021 / 11:02 AM IST

The Indian market witnessed mild bouts of volatility during the week ended August 27 even as the equity benchmarks the Sensex and the Nifty scaled fresh peaks of 56,198.13 and 16,722.05, respectively.

For the week, the Sensex rose 795.4 points, or 1.43 percent, to close at 56,124.72, while the Nifty settled with a gain of 255 points, or 1.54 percent, at 16,705.2.

Mid and smallcaps outperformed the frontline stocks as the BSE Midcap and smallcap indices jumped 2-2.5 percent.

Investors remained wary of the Jackson Hole Symposium anticipating cues of monetary stimulus tapering. Federal Reserve chief Jerome Powell took a cautious stance on a potential withdrawal of the central bank's huge economic stimulus measures later this year.

In the coming week, global cues, Q1 GDP numbers, COVID-related news flow and auto sales numbers of August will have their say in the market.

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Here's how top analysts and brokerages foresee the market trend for the coming week. Take a look:

Analyst: Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

From the long-term perspective, the overall trend of the market remains positive led by the opening up of the economy, improving economic data points and pickup in vaccinations.

The result season is over with better than expected delivery and vaccination drive going on in full swing.

However, the sharp outperformance in the past 18 months has led to concerns on valuations.

The likely impact on liquidity due to changes in global monetary policy has concerned investors over the last few days.

While midcaps have started participating in the market up-move in the last couple of days, we believe that largecaps offer a better margin of safety in the current environment and could continue to remain in focus in the near term.

Ajit Mishra, VP Research. Religare Broking

In the coming week, participants will be eyeing crucial macroeconomic data to start with. First, the GDP data for Q1FY22 and infrastructure output data are scheduled for August 31.

In the following sessions, the monthly auto sales will also start pouring in. Besides, the Markit Manufacturing PMI data and Markit Services PMI data are scheduled for September 1 and September 3, respectively.

The market will be initially taking cues from global counterparts, in reaction to the statements made by the US Fed Chair in the Jackson Hole symposium.

Though the Nifty is inching towards the next milestone of 17,000, the recent surge lacks decisiveness due to the continuous underperformance of the banking index.

Going ahead, in case of any dip, Nifty would find support at 15,500 and 15,380 levels. We feel it’s prudent to maintain a positive yet cautious approach and choose stocks from the sectors which are trading in sync with the benchmark.

Also, participants should prefer index majors and other heavyweights as any correction in markets may again derail the recovery midcap and smallcap space.

Vinod Nair, Head of Research at Geojit Financial Services

In the coming week, the release of key economic data such as Q1GDP growth rate and manufacturing and services PMI will influence the market. The Q1 GDP is expected to show a sharp growth owing to a low base and recovery in economic activities towards the end of the quarter.

Ruchit Jain, Senior Technical and Derivatives Analyst at Angel Broking

Nifty continues to be in an uptrend so one should continue to trade with a positive bias and avoid taking any contra trades until any reversal is seen.

The immediate supports for Nifty are placed around 16,600 and 16,500 while the levels to watch on the upside will be 16,800 and then 17,000.

One should keep track of the global developments and also book timely profits in trading positions.

Brokerage firm: Samco Research

Indian bourses are expected to see whipsaw trade post Fed’s Jackson Hole meeting outcome. Participants are eager to understand the timelines for gradual tapering of bond purchases to judge the mood of the Street.

The market could also be impacted by an eventful economic calendar that begins with quarterly GDP growth rate numbers, followed by auto sales numbers and manufacturing PMI data.

Profit-booking may occur in certain overpriced stocks, however, investing in high-quality companies in stages would be a smart strategy.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Nishant Kumar
first published: Aug 29, 2021 11:02 am
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