Sensex, Nifty next week: From RBI interest rate decision to the US unemployment rate, factors that may drive Dalal Street

In the passing week, Indian markets ended in the red as Crude Oil continues to stay above the $90 level which will be a threat to inflation. Persistent foreign fund outflows too dented sentiments. Next week investors will be eyeing key data releases such as RBI Interest Rate Decision, Bank Loan Growth, and Deposit Growth data, along with the Balance of Trade and Unemployment Rate in the US that will keep the markets buzzing.

Economic events: The coming week is going to be very crucial as it’s the start of the new month and there will be lots of macroeconomic data to guide the markets. Auto and cement stocks will be reacting to their monthly sales numbers at the start of the week. Traders will be eyeing the S&P Global Manufacturing PMI data, which is scheduled to be released on October 03, and the S&P Global Composite PMI, and S&P Global Services PMI on October 05. Besides, RBI Interest Rate Decision, Cash Reserve Ratio, Foreign Exchange Reserves, Bank Loan Growth, and Deposit Growth data are scheduled to be released on September 06.

Besides the 52nd meeting of the GST Council, chaired by the Union finance minister and comprising state ministers will be held on October 07, 2023, at Vigyan Bhawan, New Delhi.

US market data: On the global front, investors would be eyeing economic data from the world’s largest economy, the United States (US), starting with S&P Global Manufacturing PMI, ISM Manufacturing Employment on October 02 followed by Redbook, JOLTs Job Openings on October 03, S&P Global Composite PMI, ISM Services PMI, ISM Services Employment, and Factory Orders on October 04, Initial Jobless Claims, Balance of Trade on October 05, Unemployment Rate, Non-Farm Payrolls, and Baker Hughes Total Rig Count on October 06.

Market trends: Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities said that on the first day of the October series, Indian markets started strong and continued to build on the gains through the session. Smaller stocks represented by Nifty Mid and small cap 100 Index outperformed the Nifty where they gained 1.08 per cent and 0.99 per cent respectively as against 0.59 per cent rise in the Nifty. However, Nifty ended the week with a 0.18 per cent fall, to close at 19638.

Vakil added that Asian equities gained, led by a rally in Hong Kong on hopes that China’s Golden Week holiday will spur a consumption revival and boost sentiment marred by the country’s property sector crisis. All the sectoral indices ended in the green except Nifty IT. “IT stocks were impacted as Accenture, the IT services giant reported its Q4 revenue numbers within its targeted range but fell short of estimates”. The company forecasted the first-quarter revenue below the Wall Street targets signaling that high inflation and interest rate pressures will hurt demand through next year.

Technical Outlook: “Nifty has been finding support near its 50-day EMA for the last three consecutive sessions. Any level above 19767 would confirm the bullish trend reversal, while a level below 19492 would resume the downtrend in the Nifty.” Vakil said.

Bank Nifty: Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said that the Bank Nifty saw a resurgence in bullish momentum as the bulls successfully defended the key support level at 44,200. However, challenges persist as the 20-day moving average (20DMA) at 45,000 continues to act as a strong resistance.

The index appears to be consolidating within a range, with levels of 44,200 on the downside and 45,000 on the upside defining this range. “A decisive break on either side of this range will likely trigger fresh trending moves. In particular, the support at 44,200 is crucial and could determine the index's near-term direction”, Shah said.