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The Indian stock market experienced a rebound driven by IT sector strength, snapping a two-day decline. However, market sentiment remains cautious due to persistent geopolitical tensions and the anticipation of key global economic indicators, particularly from the U.S. Federal Reserve’s Jackson Hole Symposium. Investors are weighing the potential impact of inflation comments on future interest rate decisions, both domestically and internationally. Technical indicators suggest the Nifty faces resistance at 24,200, with a move above this level needed to shift the near-term outlook to bullish. Conversely, a failure to hold above this level could lead to further price corrections.
Indian stock markets concluded Friday’s session with significant gains, reversing a two-day downtrend as a strong performance from heavyweight information technology (IT) stocks propelled the indices higher. The benchmark Sensex closed up 331 points at 77,264, while the Nifty 50 registered an approximate 85-point increase to end the day around 24,176.
Broader market indices also mirrored the positive sentiment, with the India VIX, a key measure of market volatility, declining by over 4%. This surge in domestic equities occurred amidst a backdrop of mixed global signals and ongoing geopolitical tensions.
Analysts suggest that the Indian equity market may trade within a broader range in the near term. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services (Wealth Management), noted that investors are closely monitoring geopolitical developments and key macroeconomic triggers for directional cues. The cooling of Brent crude oil prices to $88 per barrel, marking an approximate 8% drop over the past nine days, was viewed as a potential positive factor.
Market participants are keenly awaiting remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole Symposium, particularly concerning inflation. His comments could influence global interest rate expectations, which in turn may impact domestic policy rates, especially following a hawkish tone in the Reserve Bank of India’s August minutes that revived discussions of potential rate hikes.
In international markets, U.S. stocks concluded Friday’s trading session on a lower note. Federal Reserve Chair Kevin Warsh’s reiteration of the central bank’s commitment to its 2% inflation target led investors to recalibrate expectations regarding a potential September interest rate move. The S&P 500 fell 19.94 points (0.26%) to 7,711.05, the Nasdaq Composite declined 140.79 points (0.53%) to 26,400.56, and the Dow Jones Industrial Average slipped 11.06 points (0.02%) to 53,558.38.
Conversely, European shares experienced an uptick, with French stocks staging a recovery. The STOXX 600 index gained 0.5% to 655.16, achieving a modest weekly gain, while France’s CAC 40 rose approximately 1%. Investors in Europe assessed Fed Chair Warsh’s Jackson Hole speech.
From a technical perspective, Rupak De, Senior Technical Analyst at LKP Securities, observed that the Nifty has re-entered its rising channel after a volatile session, though the trend remains subdued. The index continues to trade below its 50-day exponential moving average (EMA), indicating a lack of strong bullish momentum and confinement within a narrow trading band.
De highlighted 24,200 as a potential immediate resistance level for the Nifty. He indicated that a sustained move below this level could maintain a weaker sentiment, with a possible decline towards 23,900. A breach below 23,900 might trigger further downward correction. Conversely, a decisive breakthrough above 24,200 could improve market sentiment and strengthen the near-term trend.
The most active stocks in terms of turnover on the National Stock Exchange (NSE) included Tejas Networks (Rs 2,419 crore), Ather Energy (Rs 2,314 crore), BSE (Rs 1,614 crore), Coal India (Rs 1,537 crore), IFCI (Rs 1,245 crore), ICICI Bank (Rs 1,231 crore), and HDFC Bank (Rs 1,180 crore). In terms of trading volume, Vodafone Idea (37.55 crore shares), IFCI (13.93 crore shares), Ola Electric (7.85 crore shares), Yes Bank (6.35 crore shares), Sagility India (6.08 crore shares), NMDC Steel (5.75 crore shares), and Groww (5.33 crore shares) were among the most actively traded.
Stocks exhibiting buying interest included NMDC Steel, Newgen Software, Ather Energy, Tejas Networks, PTC Industries, IFCI, and Tata Teleservices. Ather Energy, PTC Industries, Coforge, Shyam Metalics, Oracle, HFCL, and Glenmark Pharma reached their 52-week highs. On the other hand, Devyani International, Physicswallah, Sapphire Foods, Whirlpool India, Bharat Dynamics, Bombay Burmah, and City Union Bank witnessed selling pressure. Stocks hitting their 52-week lows included Aditya Birla Retail, PI Industries, Groww, ITC, IRFC, RVNL, and Inox Wind.
On Friday, out of 3,603 stocks traded on the NSE, 1,918 advanced, 1,561 declined, and 124 remained unchanged, suggesting a positive breadth in the market.
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