Nifty 50 Sensex :The market rose for the fifth consecutive week ending August 19, but only by a third of a percent as Friday corrections trimmed the weekly gains amid profit-booking and caution due to the rising US dollar index.
Nifty Midcap and smallcap
Last week, the BSE Sensex reclaimed the psychological 60,000 mark, rising 183 points to close at 59,646, and the Nifty50 moved closer to 18,000, rising 60 points to close at 17,758, while the Nifty Midcap 100 and Smallcap 100 indices gained 0.6 percent and 0.4 percent, respectively.
FMCG, infrastructure, energy, and real estate indices all gained more than 1%, while pharma, oil and gas, and banks all ended in the red.
Due to a lack of domestic cues and an expiry in the coming week, experts predict that consolidation and volatility will continue, with a focus on global cues, including the Jackson Hole Economic Symposium.
Markets may experience consolidation after five weeks of consecutive gains, which would be beneficial. We haven’t seen any significant declines in the index in recent phases of consolidation; however, a lot will depend on the performance of the US indices next week, where we still see room for further upside,” said Ajit Mishra, VP – Research at Religare Broking.
According to the expert, it is prudent to focus more on risk management because index correction/consolidation usually derail the momentum even in the top-performing sectors.
Let’s look at the 10 most important factors that will keep traders busy this week:
FII Capital Flow
Foreign Institutional Investors (FIIs) remained consistent buyers this month, with the exception of one day when they may have been net sellers due to Blackstone’s stake sale in Sona Comstar on August 18. They have purchased nearly Rs 18,000 crore worth of shares in the current month, whereas DIIs have taken advantage of the strong market mood by selling more than Rs 6,000 crore worth of shares during the month.
As a result, the market will be watching the mood at the FII desk closely, as experts believe any reversal in their trend could put a temporary halt to the market rally.
The US Dollar Index
The movement of the US dollar index, which measures the value of the US dollar against a basket of the world’s leading currencies, will also be important to monitor, especially given the DXY’s recent recovery.
Following its recent low, the US dollar index resumed its rally, rising 2.86 percent in less than a week to close at 108.10 on Friday, as the possibility of another 75 basis point hike at the September policy meeting appears to be increasing.
Monthly F&O Expiry Week
On Thursday, August futures and options contracts will expire, as market participants will close their current month positions and roll them over to the following month. As a result, some volatility cannot be ruled out this week, and 17,000, which has the highest Put open interest, could act as a crucial support, while 18,000, which has the highest Call open interest, could act as a crucial resistance for the Nifty, according to experts.
Maximum Call open interest has been seen at the 18,000 strike, followed by the 17,900 strike, with Call writing at the 18,000 strike, then the 18,600 and 17,900 strikes. The maximum Put open interest was observed at the 17,000 strike, followed by the 17,500 strike, with Put writing at the 17,300 strike, then the 17,200 and 17,500 strikes, and Put unwinding at the 17,900, 18,000, and 17,800 strikes.