November 8, 2024
Financial Assets

Nifty eyeing fresh peak beyond 25,000 after Jackson Hole. 5 factors to track


After US Fed Chair Jerome Powell signaled that the Fed would start cutting interest rates from September at the Jackson Hole Symposium, Nifty bulls are eyeing fresh peaks beyond the 25,000 levels.

Last week, Sensex and Nifty ended around 1% higher, buoyed by positive US economic data which has diminished the likelihood of a US recession.

Market participants will first respond to the dovish remarks by the US Fed Chair at the Jackson Hole symposium. After a period of consolidation, US markets resumed their upward movement on Friday and seem poised to test record highs soon.

Here are key factors that may sway Dalal Street in the week:

1) Rate cut hopes after Jackson Hole
Powell’s comments suggested a dovish urgency, which has excited investors, with markets currently pricing in a 60% chance of a 25 basis point rate cut in September and a 30% chance of a more aggressive 50 basis point cut, despite some lingering uncertainty, Pravesh Gour of Swastika Investmart, said.

A potential rate cut by the Fed would likely boost market sentiment and drive up stock prices.

2) FII/DII action
Apparently concerned about the valuation differential in two parts of the market, foreign institutional investors (FIIs) have so far sold stocks worth Rs 28,671 crore through the exchanges but have been net buyers for Rs 12,367 crore through the primary market so far in August.

3) RIL AGM
India’s largest listed conglomerate Reliance Industries (RIL) will hold its annual general meeting (AGM) on August 29 at 2 pm in which billionaire Mukesh Ambani will address shareholders. The Ambanis have a history of making key announcements at the AGM.

4) Macro data
The outlook for the market will be guided by the major domestic and global economic data. India will release its July infrastructure output numbers and Q2 GDP numbers on August 30.

5) Technicals
The index continues to display strength, with the bullish structure remaining intact. The momentum is expected to persist into the coming week, with a potential breakout above 24,900 likely driving the index towards the 25,100 and 25,400 levels. On the downside, the 24,350 level will now serve as critical weekly support, said Palka Arora Chopra, Director of Master Capital Services.



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