The factors that will influence the Indian equity market next week
Indian equity market declined last week due to cross border tension, weak macroeconomic data, and global cues. Equity markets have broken their crucial technical levels last week. Technically the benchmark indices are looking bearish in the short term basis but any bounce back can be considered as a fresh buying opportunity. The markets for the next week will depend on the below key factors.
You may also like to read last week’s market updates here
Global Equity Market Updates
The global equity market played a vital role last week to dragged down the Indian markets last week. The overnight profit booking in the US technology stocks created negative sentiments globally. The US market closed lower last Friday despite the unemployment rate has fallen to 8.4%. Next week on Monday the US market will be holiday due to Labor Day.
The European markets will trade on the hopes of a stimulus package which will get clarity on the ECB meeting next week. The merger talks between the Spanish lenders Bankia and CaixaBank can boost positive sentiments in the markets.
Traders need to watch closely the below-mentioned events to track the global equity market
| Important Global Macro Data Next Week | ||
| 8th Sept | GDP growth rate | Japan |
| 9th Sept | Inflation rate | China |
| 10th Sept | Jobless claim | US |
| ECB meeting | UK | |
| 11th Sept | GDP growth rate | UK |
| Industrial Production | UK | |
| Inflation rate | US | |
Cross border tension
The cross border tension between India and China has dragged down the market on last Monday. The tension has not yet eased, India’s Defence Minister Rajnath Singh and his Chinese counterpart General Wei Fenghe had a talk late Friday to defuse tension.
But the talks seemed to have failed to make any solution on a common approach to remove thousands of troops ranged against each other. Earlier, India had also banned Chinese apps, blocked Chinese products at ports, and stopping its companies from bidding for contracts to put pressure on the Chinese economy.
Traders need to keep track of cross border situations which is tensed at this moment for the next week.
Coronavirus news
Worldwide the economy is bad shape due to the coronavirus pandemic, the US being number one in the total coronavirus cases in the global tally followed by Brazil and India. The confirmed coronavirus cases worldwide rose more than 26.5 million.
In the US and Brazil infections are slowing down recently whereas in India it touched a record high of 86432 cases in a single day. In India, the total confirmed coronavirus cases registered more than 40L
The US President Donald Trump has recently made a statement that vaccine will be available in the US from 1st of November. Any such important announcement related to the vaccine will move the markets in a positive direction.
Equity Market Technical levels: Nifty and Bank Nifty trend
Nifty futures trade setup for next week
Primary Trend of Nifty futures next week: Negative
Range-Bound Trend of Nifty futures: All up Moves Initiates Profit Booking (Sale) @ 11550 whereas All Down Moves Initiates Short Covering (Buy) @ 11250
If Nifty share price in futures Moves Above 11428 and sustain. Then you should Buy with 1st Target of 11458 during the day or week with a Stop Loss of 11332 FOR the Target of 11458 – 11504- 11550- 11620
Suppose Nifty share price in futures Moves Below 11332 and sustain. Then you should Sell with 1st Target of 11294 during the day or week with a Stop Loss of 11715. FOR the Target of 11294- 11250- 11222-11156
Bank Nifty trend in futures for next week
Primary Trend of Bank Nifty future for next week: Negative
Range-Bound Trend of Bank Nifty share price in future: All up Moves Initiates Profit Booking (Sale) @ 23700, whereas All Down Moves Initiates Short Covering (Buy) @ 22550
Bank Nifty share price in the future Moves Above 23280 and sustain. Then you should Buy with the 1st Target of 23398 during the day with a Stop Loss of 22820. FOR the Target of 23398 – 23550- 23710- 24020
If Bank Nifty shares price in the future Moves Below 22820 and sustained. Then you should Sell with the 1st Target of 22675 during the day with a Stop Loss of 24602. FOR the Target of 22675 – 22540- 22250 – 21950
Macro data
The important macro data for the next week are
| Macro Data Next Week | |
| 11th Sept | Foreign Exchange Reserve |
| Industrial Production for July | |
| Manufacturing Production | |
FIIs and DIIs movement
FIIs and DIIs were the sellers in the cash market last week. On a weekly basis, FIIs sold 3799.89 cr while DIIs sold 1088.66 cr in the cash segment.
The domestic and foreign institutional buyers are the sellers in the month of September and if the trend continues then it is negative for the market for next week for the Indian equity market. Traders should keep a close eye on FIIs and DIIs trading movement.
Conclusions:
The Indian equity market trend is looking bearish for the short term due to cross border tension, negative global cues, a hike in coronavirus cases, and selling by Institutional traders. On a Technical basis, the Nifty and Bank Nifty trend is looking negative. Any positive news from the above-mentioned points can give a bounce back in the market. Traders should remain cautious and trade with strict stop loss in the market for next week.
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Happy Investing!!
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