RBI monetary policy, Auto sales likely to drive the market next week
Market Next Week: RBI monetary policy, Auto sales, and other key factors
Indian markets closed lower on September 25 end week amid negative global market cues. The domestic market snaps six days losing streak on Friday and closed in a positive note on the last day of the week. Next week, the market direction will be decided by RBI monetary policy, auto sales numbers, PMI data, global cues among 7 other factors.
RBI monetary policy and other key factors are likely to drive the market.
Macro-Economic factor
In the coming week, macroeconomic data will play an important role to set the direction of the market. The market will react to the Infrastructure data, PMI data, Current account, and the most important one is the RBI monetary policy. The market is expecting no rate cut due to higher inflation but an accommodative stance to continue in the next RBI monetary policy scheduled on 1st October. The details of macroeconomic data that are going to be announced next week are
Auto Sales Number
The auto industry has started showing signs of recovery ahead of the festive season. Last month auto sales recorded a double-digit growth after witnessing four months of decline due to the coronavirus pandemic. The sales of entry-level and compact vehicles both new as well as used cars went up last month. The retail auto sales are gradually picking up with the launch of new models by various auto companies.
The auto companies have got a significant increase in inquiries and bookings in the month of September and feel that the momentum will continue during the festive season. We can see some good auto sales numbers due to the relaxation of lockdown and festive season this month. Though the market is not expecting a rate cut in the RBI policy, a surprise rate cut can boost the sales in the auto sector.
Global Equity Markets Updates
Last week the global equity markets played a vital role to drive the domestic markets. The domestic markets reacted strongly on various global cues like for foreign banks money laundering allegation, a spike in coronavirus cases in Europe, delay in the US stimulus package, and of course global economic slowdown worries.
The next week the global equity market would remain volatile. The macroeconomic data scheduled for the next week of various countries will set the global market direction.
India-China Cross border tension
India-China border tension has not eased. India has clearly told China that it will talk about disengagement in the whole of the Ladakh region not only a part. India has warned China that Indian soldiers will fire if PLA troops will try to outnumber them in Galwan on June 15 as per the report published in Deccan Chronicle
As per the reports published in The Print, India and China have decided to hold another round of talks between senior commanders as well as involving diplomats under the framework of the Working Mechanism for Consultation and Coordination on India-China Border Affairs (WMCC) one of the bilateral agreements for peaceful resolution of disputes
Indian market will watch closely the development of the India-China tension and accordingly react to this. As the border tension is not yet resolved completely trader should keep a close eye on this matter.
Coronavirus news
India has crossed 59 Lakh confirmed coronavirus cases with over 96000 active cases. The country has reported more than 88 thousand coronavirus cases in the last 24 hrs as per the sources. In India, some places have seen increasing coronavirus cases. Traders now fear for the second wave of infection and further strict restriction in those places.
In Europe, the second wave of coronavirus has created fears among traders for further lockdown and restrictions. We have already seen the market reaction on this news last week. The coronavirus vaccines related news can also make the market volatile and the traders should keep a close eye on the news for next week.
Nifty and Bank Nifty futures ahead of RBI monetary policy
Nifty futures trade setup for next week
Primary Trend of Nifty futures next week: Mild Negative
Range-Bound Trend of Nifty futures: All up Moves Initiates Profit Booking (Sale) @ 11200 whereas All Down Moves Initiates Short Covering (Buy) @ 10770
If Nifty share price in futures Moves Above 11056 and sustain. Then you should Buy with 1st Target of 11108 during the day or week with a Stop Loss of 10970 FOR the Target of 11108- 11147- 11174- 11215
Suppose Nifty share price in futures Moves Below 10970 and sustain. Then you should Sell with 1st Target of 10945 during the day or week with a Stop Loss of 11056. FOR the Target of 10945- 10902- 10838-10770
Bank Nifty trend in futures for next week
Primary Trend of Bank Nifty future for next week: Mild Negative
Range-Bound Trend of Bank Nifty share price in future: All up Moves Initiates Profit Booking (Sale) @ 21500, whereas All Down Moves Initiates Short Covering (Buy) @ 20200
Bank Nifty share price in the future Moves Above 21030 and sustain. Then you should Buy with the 1st Target of 21190 during the day with a Stop Loss of 20805. FOR the Target of 21190 – 21340- 21470- 21810
If Bank Nifty shares price in the future Moves Below 20805 and sustained. Then you should Sell with the 1st Target of 20680 during the day with a Stop Loss of 21030. FOR the Target of 20680 – 20550- 20350 – 20160
FIIs and DIIs movement
FIIs were the seller and DIIs were the buyer last week in the cash market segment. The FIIs sold Rs 10,490.91 crores while DIIs bought Rs 4249.65 crores in the cash market on 25th September end week.
FIIs have turned as the seller in the cash market last week and DIIs turned buyers. It looks FIIs selling spree will continue in the coming week also. Indian market may see some selling pressure if FIIs continue its selling in the cash market next week.
Conclusions:
Indian markets will have four trading days in the next week. Friday, 2nd October will be a holiday for the Indian market on account of Gandhi Jayanti. Out of the four days, the last two days of the week will remain volatile due to Auto sales numbers, PMI data, and RBI monetary policy on the domestic front. On the global front also there are few macroeconomic data that will be released on Wednesday and Thursday.
Traders are advised to remain cautious during the truncated week and trade with strict stop loss. Traders can follow our daily share market opening views and Nifty and Bank Nifty futures prediction
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Happy Investing!!
Editor’s Desk
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