InvestorQ : What are the week cues you foresee for the markets in the last trading week of September 2022?
Arti Chavan made post

What are the week cues you foresee for the markets in the last trading week of September 2022?

diksha shah answered.
3 months ago

Here are some of the important cues we see for the coming week for the stock markets.

· For the previous week ending on 23rd September, Nifty closed -1.16% lower on the back of the Fed continuing to remain hawkish. In addition, the fall was broad based with the Mid-cap index losing -1.32% for the week and small cap giving up -2.32%. Smaller stocks that had rallied sharply are also likely to see pressure next week.

· RBI Monetary Policy Committee (MPC) meet will commence on 28th September and conclude on 30th September with the announcement of the monetary policy. Apart from raising the Fed rates by 50 basis points, the RBI is also likely to suggest a higher terminal interest rate of around 6.5-6.7% in the policy.

· It was a bad week for the rupee which closed in the red for the week at Rs81.26/$ on Fed fears. The level of 80/$ was decisively breached with little support from the RBI amidst negative headwinds. In a volatile month, FPIs infused Rs8,638 crore into equities and Rs4,623 in debt. However, the September inflow numbers are still nowhere close to August levels.

· Three big data points will be out for the macros. Firstly, the current account deficit (CAD) is expected at 3.4% and anything higher could push full year estimates closer to 5% of GDP. Core sector for August 2022 is likely to come in lower than the July level of 4.5% on high frequency pressure. Forex Reserves may fall steeply below $545 billion levels.

· During the week, Brent crude fell to $85/bbl and WTI Crude to $78/bbl, which will be positive for the Indian deficit number. In IPO news, all eyes will on the listing of Harsha Engineers. It is currently quoting at a GMP of 70-80% on listing, and could offer a cue for other IPOs that are being lined up.

· What is happening in China is disconcerting. Apart from the Yuan, India would also be watching for political stability in our neighbouring country and could have a deep impact on the macro risks. Expect a broad range of 17,000 to 18,000 for the Nifty, but ideally traders should stay on the sell-on-rises side amidst rising VIX.

· In global data points, key US market data include MPC member speak, durable goods orders, new home sales, trade balance, API crude inventories, GDP, PCE. For rest of the world, key data inputs will be UK MPC member speak, final GDP, current account; Japan jobs data, retail sales, Kuroda speech; China PMI.