Week Ahead...

Benchmark indices, Sensex and Nifty touched their fresh record high levels of 56,198.13 (on August 25) and 16,722.05 (on August 27), respectively. For the week BSE Sensex added 795.4 points (1.43 percent) to close at 56124.72, while the Nifty50 rose 254.7 points (1.54 percent) to end at 16705.2 levels.

The rally was more broad-based this week as mid and small-caps bounced back after several weeks of underperformance. The BSE Midcap index was up 2.54 percent and Smallcap index gained 2.04 percent during the week.

Though the Nifty is inching towards the next milestone of '17,000', the recent surge lacks decisiveness due to the continuous underperformance of the banking index. We feel it's prudent to maintain a positive yet cautious approach and choose stocks from the sectors which are trading in sync with the benchmark.

Key Factors To Watch out :

The GDP numbers for the first quarter of FY22 will be released on Tuesday.

The economic growth is expected to be robust due to a low base in a year-ago quarter.

Infrastructure output and fiscal deficit for July will also be released on Tuesday.

The Market Manufacturing PMI for August will be released on Wednesday and Markit Services & Composite PMI data on Friday. Foreign exchange reserves for the week ended August 27 will also be released on Friday.

Auto stocks are expected to be in focus in the middle of the week as companies will start releasing August sales data from Wednesday. The auto index was the underperformer in the week gone by, falling over a percent.

Last week, foreign institutional investors (FIIs) sold equities worth Rs 6833.33 crore, while domestic institutional investors (DIIs) bought equities worth Rs 6,382.57 crore. So far in August, FIIs have sold equities worth Rs 7,652.49 crore and DIIs have bought equities worth Rs 8,078.24 crore.

Technically Nifty50 gained a fourth of a percent on Friday and rallied 1.55 percent for the week, witnessing bullish candle formation on the daily as well as weekly charts. This could be an indication of continuity on the upside in the coming week too with the index marching towards 16,900 mark, immediate support is placed at 16,550 levels.