Weekly Market Outlook ( 5th August to 9th August 2024)

 

Domestic Market Outlook

Nifty Performance: After breaching the 25,000 level, the Nifty index faced profit booking due to global market weakness, closing down by 0.5%. The decline was influenced by weak earnings guidance from major U.S. companies and disappointing U.S. economic data.

Economic Resilience: Despite global challenges, India's economy shows resilience, supported by strong PMI data, GST collections exceeding Rs 1.80 lakh crore, and robust corporate earnings. This suggests a buying opportunity amid the global downturn, especially as the domestic economy benefits from falling oil prices.

RBI Credit Policy: The Reserve Bank of India (RBI) credit policy announcement on Thursday is a key event. While rates are expected to remain unchanged, the RBI's commentary will be critical for market sentiment. Upcoming PMI data releases from major economies will also be closely watched.

Sector Focus: Positive sentiment is expected for FMCG, auto, pharma, IT, and retail stocks following impressive Q1 results. Rail, PSU, and defense stocks look attractive after recent corrections. Oil marketing and airline stocks may benefit from the decline in oil prices.

Global Market Update

Global Decline: The Nasdaq Composite and S&P 500 experienced declines, driven by disappointing tech sector results and weak U.S. economic data, including an eight-month low PMI and rising unemployment.

Bond Yields: U.S. 10-year bond yield dropped to 3.18% following dovish Fed commentary, with markets hopeful for a rate cut in September.

Other Central Banks: The Bank of England cut interest rates by 25 basis points, while the Bank of Japan raised rates by 15 basis points.

Global Politics & Global Markets:

The current Middel east tension might create market correction followed with falling U.S markets and big giants’ weak numbers in 2nd Quarter and bleak guidance.  Profit booking of NIFTY at 25000 levels cannot be ruled out.

Key Global Data Releases

·       U.S.: Services PMI, Composite PMI, Trade Balance, Consumer Credit, and Initial Jobless Claims.

·       Europe: Services PMI, Composite PMI, Car Registration, Factory Orders, Industrial Orders, Trade Balance, CPI, and Unemployment.

·       Japan: Services PMI, Composite PMI, Household Spending, Money Supply.

·       China: Services PMI, Composite PMI, Trade Balance, Money Supply, PPI, CPI.

·       India: Services PMI, Composite PMI, RBI Credit Policy. This comprehensive outlook suggests a cautious yet opportunistic approach for the coming week, with a focus on resilient sectors and monitoring key economic events and data releases.