Macro data and global cues mainly to trigger market this week

Mixed trends among heavyweight stocks limited gains

MUMBAI: Indian stock markets edged closer to record highs by the end of last week, buoyed by improving global sentiments and mostly favorable cues.

As we enter the last week of August, investors will closely watch domestic and global macroeconomic data, India’s economic growth figures, foreign fund flows, crude oil prices, and broader global trends.

The domestic benchmarks extended their gains for the seventh consecutive session on Friday, marking the longest rally of the year. However, the pace of gains slowed as caution prevailed ahead of US Federal Reserve Chair Jerome Powell’s speech at Jackson Hole.

While the overall sentiment remained positive, mixed trends among heavyweight stocks limited the gains. Both the Nifty 50 and Sensex ended near the week’s highs.

Indices rose 3%

Over the past seven sessions, the Sensex and Nifty 50 have risen by approximately three per cent, driven by growing expectations of a US interest rate cut and sustained domestic inflows.

Notably, about half of these gains occurred on the second day of the rally as concerns about a US recession eased. Since then, daily gains have moderated, and the Nifty’s trading range has narrowed to under 100 points in the last two sessions.

“Domestic sentiment remained optimistic as investors anticipated a strong earnings rebound following the first quarter of the 2024–2025 fiscal year, which showed only a moderate year-over-year increase,” commented a Director from a leading brokerage firm.

The frontline indices continued their winning streak for the second consecutive week, reaching a three-week high, although broader markets underperformed, and market breadth favored declines. Global market sentiments improved following better-than-expected US economic data.

US stock market

“The Indian stock market is likely to mirror gains seen in the US stock market as the chances of a ‘soft landing’ for the global economy improve, amid signs of economic softening. A potential rate cut by the Fed could boost market sentiment and drive up stock prices,” said a Senior Technical Analyst with an investment firm.

The 30-share BSE Sensex rose for the fourth straight session, closing 33.02 points, or 0.04 percent higher, at 81,086.21. The NSE Nifty 50 also inched up 11.65 points, or 0.05 percent, to close at 24,823.15, marking its seventh consecutive session of gains.

All major sectors, except real estate, participated in the rally, with metals, FMCG, and financial services leading the charge.

Powell’s speech at the Jackson Hole Economic Symposium on Friday evening signaled that the central bank is likely to cut interest rates in the September meeting.

“A rate cut of up to 25 basis points is anticipated in September, which, if confirmed, will be viewed positively by the market in the short term. The longer-term trend will depend on the central banks’ optimistic outlook that accommodative policies will continue, potentially leading to further cuts in future meetings,” said the head of a capital research firm.