Week Ahead

Indian markets continued to rise for the second straight week which ended August 13. Strong inflow of funds from both domestic and foreign investors amid favourable global cues and supportive macroeconomic helped benchmark claim new highs. Benchmark indices, Sensex and Nifty, touched their fresh record high levels of 55,487.79 and 16,543.60, on August 13.

On a weekly basis, BSE Sensex rose 1,159.57 points (2.13 percent) to close at 55,437.29, while the Nifty50 added 290.9 points (1.79 percent) to end at 16529.10 levels.

Markets are taking comfort from the upbeat global markets and supportive domestic cues amid the fear of a third Covid wave. However, we are now seeing restricted participation and expect the same trend to continue, at least in the near future.

After being absent for several weeks, overseas money once again flew to Indian markets as benchmark indices claimed new highs.

FIIs have net bought Rs 879.2 crore and DIIs bought Rs 636.38 crore worth of equity shares last week.

As a result, FIIs turned have now turned net buyers to the tune of Rs 3,495.24 crore in August, after net selling in the previous four consecutive months. DIIs continued their buying for the sixth consecutive month, purchasing Rs 1,533.22 crore worth of shares during August. Hence, the flow will be crucial for the sustenance of further upside in the market.

Technically long bull candle was formed on Friday on the daily chart, which indicates an upside breakout of the small narrow range of the last 5-6 sessions. This is positive indication and one may expect upside momentum to continue in the next session. This pattern signal a formation of new sequence of higher tops and bottoms on the daily chart, where higher bottoms are part of a range movement and this is uptrend continuation pattern.

We feel, having reached an initial upside target of 16,500 levels on Friday, the Nifty is now expected to head towards the next upside target of around 16,800-17,000 levels in few weeks. Immediate support is placed at 16,380 levels.