Week Ahead

The BSE Sensex rose 1,075 points to 59,463, and the Nifty50 climbed more than 300 points to 17,698, while the Nifty Midcap 100 and Smallcap 100 indices also participated in the market run, rising 1.8 percent and 1.1 percent respectively.

In the truncated week beginning tomorrow, the market participants will first react to the quarterly earnings of the Life Insurance Corporation, ONGC, and Hero MotoCorp, along with June industrial output and July CPI inflation data on Tuesday. Overall, the positive sentiment is expected to continue with focus on global cues, though given the consistent rally in the past several weeks, consolidation can't be ruled out.

One of the key drivers behind the recovery in equity markets in last several weeks is the change in mood of foreign institutional investors. They have been consistent buyers in Indian equities since July 28 and in August, recorded the highest monthly buying since February 2021.They were net buyers for second consecutive week, pouring in more than Rs 14,800 crore in August so far, whereas DIIs have taken the advantage of market rally driven by FIIs, to book profits worth Rs 4,200 crore in current month, becoming net sellers for the first time since February 2021.

Technically Nifty50 has formed small bodied bullish candle on the daily charts and strong bullish candlestick pattern on the weekly scale, continuing higher high higher low formation for fourth consecutive week. The index is gradually inching towards the resistance point of long down sloping trend line adjoining high of October 18, 2021 and January 18, 2022, which is around 17,800-17,900 levels, with support at 17,500 mark.

The Option data indicated that the Nifty50 could see an immediate trading range of 17,300 to 17,800 levels, while a broader trading range may be between 17,200 to 18,000 levels in coming sessions.