The Indian stock market wrapped up September on a high note, with a strong bullish rally driven by robust global cues and domestic optimism. As the first week of October unfolds, investors are gearing up to monitor several key triggers that will influence the market’s trajectory. From macroeconomic data releases and auto sales figures to IPO action and foreign fund inflows, the week promises to be action-packed. Here’s a detailed look at what’s been driving the market and what to expect in the coming days.
September Surge
September saw the Indian equity benchmarks, Sensex and Nifty 50, consistently reaching new highs. Both indices achieved fresh record highs for six consecutive sessions, logging a third straight weekly gain. The rally was largely propelled by the strong performance of metals, financial stocks, and the anticipation of positive global cues.
The surge was further fueled by a 50-basis-point rate cut by the US Federal Reserve. This was complemented by China’s monetary stimulus measures, which boosted investor confidence across global markets.
The Nifty 50 touched a new all-time high of 26,277 on Friday’s trading before closing slightly lower at 26,199, marking a 0.14% drop. Despite the dip, this marked the third consecutive session where the index stayed above the psychological level of 26,000. Meanwhile, the S&P BSE Sensex hit a new peak of 85,978, climbing 0.16% before ending the session at 85,615, reflecting a 0.30% fall but remaining above the 85,000 mark for the third straight session. For the week, the Sensex surged by 1,027.54 points (1.21%), while the Nifty jumped by 388 points (1.50%).
Metals and Financials Shine
The bullish momentum was primarily driven by rate-sensitive sectors such as banking, financials, auto, and real estate. However, towards the end of the week, metals and power stocks stole the spotlight, with metals delivering an impressive performance.
Metal stocks soared by more than 7% in what was their biggest weekly rise since December 2022. The rally was supported by strong metal prices and hopes that China’s new stimulus measures would revitalize its economy. This optimism also curbed concerns about the dumping of steel products.
Financial stocks, particularly banking and NBFCs (Non-Banking Financial Companies), also saw significant buying interest, fueled by expectations of improving credit growth and declining NPAs (Non-Performing Assets). IT and export-oriented sectors rallied as well, anticipating a recovery in discretionary spending based on signals from American IT peers.
However, the broader indices underperformed the benchmark indices, ending flat to marginally lower. This divergence indicates that while blue-chip stocks attracted significant investor interest, the midcap and smallcap segments faced selling pressure.
Key Triggers
As we step into the first week of October, several factors are expected to dictate the market’s direction:
Auto Sales Data
Auto stocks will be in focus as Original Equipment Manufacturers (OEMs) release their monthly auto sales figures on October 1. These numbers will offer insights into the demand trajectory for the sector, particularly with the festive season around the corner.
Macroeconomic Data Releases
Investors will keep a close eye on crucial macroeconomic indicators, such as Current Account Data, India Manufacturing PMI, India Composite PMI, and India Services PMI.
Q2 Corporate Updates
With the earnings season around the corner, companies will start releasing their July-September quarter (Q2FY25) updates. Sectors like IT and banking are expected to be in the spotlight.
SEBI Board Meeting
The Securities and Exchange Board of India (SEBI) will hold its board meeting on Monday, September 30. Any announcements regarding regulatory changes, foreign investment norms, or market infrastructure enhancements could significantly impact market dynamics.
IPO Frenzy
The primary market is set to witness intense activity this week, with several IPOs and listings scheduled across the mainboard and SME (Small and Medium Enterprises) segments.
Mainboard IPOs: The highly anticipated Hyundai Motor IPO and Afcons Infrastructure IPO are expected to open for bidding, although the exact dates have yet to be announced.
Ongoing Issues: The Diffusion Engineers IPO will close for bidding on Monday, September 30.
SME Segment: Three new SME IPOs will open for subscription, while six ongoing issues will close for bidding.
Listings
Several companies are slated to debut on the stock exchanges, including Manba Finance on September 30, KRN Heat Exchanger on October 3, Diffusion Engineers on October 4, and an additional nine SMEs on either BSE SME or NSE SME this week.
Foreign Institutional Investor (FII) Activity
Foreign Institutional Investors (FIIs) have emerged as net buyers this month, injecting Rs 25,215.25 crore into the cash segment, while Domestic Institutional Investors (DIIs) purchased Rs 25,214.25 crore.
In the debt markets, foreign portfolio investors (FPIs) invested Rs 8,543 crore, contributing to a net investment of Rs 91,702 crore across debt, hybrid, debt-VRR, and equities as of September 27.
Global Cues
Global factors will play a crucial role in shaping market sentiment, especially in the absence of major domestic events.
China’s Stimulus Measures: The People’s Bank of China (PBoC) recently announced interest rate cuts and fiscal stimulus measures, which sparked a rally in Chinese and Hong Kong markets. This has led to a surge in global commodity prices, providing support to metal stocks.
US Economic Indicators: Investors will closely monitor key US economic data releases, including, Manufacturing PMI (September), Services PMI (September), Initial Jobless Claims, Unemployment Rate (September), and Nonfarm Payrolls (September).
Crude Oil Prices
Crude oil prices saw a mixed performance last week. While Brent crude futures settled higher at $71.89 per barrel, they registered a 3% weekly loss. Similarly, US West Texas Intermediate (WTI) crude settled at $68.18 per barrel, down by 5% for the week. In the Indian context, crude oil futures remained relatively flat at Rs 5,694 per barrel on the Multi Commodity Exchange (MCX).
Corporate Action
Several major companies, including ADS Diagnostics Ltd, Accelya Solutions India Ltd, and KPI Green Energy Ltd, will trade ex-dividend from Monday, September 30. Additionally, some stocks will trade ex-split and ex-bonus this week.
Story first published: Sunday, September 29, 2024, 13:29 [IST]
Original news source Credit: www.goodreturns.in
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