Economic figures and derivatives expiry to shape market dynamics this week: Analysts

Stock market drivers: Release of key macroeconomic numbers, monthly derivatives expiry, and global cues are likely to drive stock market movement this week, according to analysts.

Markets will also be reacting to remarks made by the US Federal Reserve Chair Jerome Powell, they said.

"This week, we expect the market to witness a gradual up-move with stock-specific action. The focus will shift to monthly F&O expiry as well as global cues.

Markets on Monday would react to commentaries of the US Fed Chair at the Jackson Hole Symposium," Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd, said.

US Fed Chair Jerome Powell on Friday signalled that the central bank would cut its interest rate in the September meeting.

Powell made a crucial speech that laid the groundwork for future interest rate reductions. Powell said, "The time has come for policy to adjust".

"The market has been expecting an interest rate cut during the next Federal Reserve meeting in September. There are indications that the rate cuts could happen at a faster pace, especially with the weakening of jobs data.

"However, Powell believes that the chances of the US economy entering a recession in the near term are very low. This implies that rate cuts would likely align with consensus expectations, and the possibility of higher rate cuts may be lower," Chief Investment Officer at Axis Securities PMS Naveen Kulkarni said.

After the Fed Chief's speech, US markets started their upward movement and closed higher on Friday.

Volatility expected this week

Traders are anticipating some volatility in the subsequent sessions due to the monthly F&O expiry scheduled this week, experts said.

Last week, the BSE benchmark jumped 649.37 points or 0.80 per cent. The NSE Nifty too closed with gains of 282 points or 1.1 per cent.

"The Indian market continued its recovery rally this week, buoyed by positive US economic data, which diminished the likelihood of a US recession. Moreover, positive global sentiment from ceasefire talks between Israel and Hamas, along with a decline in crude prices, contributed to the rally," Vinod Nair, Head of Research at Geojit Financial Services, said.

In institutional activity, foreign institutional investors (FIIs) pulled out Rs 1,608.89 crore from equities, however, domestic institutional investors kept their buying streak, purchasing Rs 13,020.29 crore worth of stocks during the previous week.

According to Religare Broking's Senior Vice-President of Research, Ajit Mishra, domestically, investors will keep an eye on economic data releases, including GDP figures and infrastructure output.

India is scheduled to release the GDP figures for the first quarter of the current fiscal year on August 30. Additionally, the production of the infrastructure sector for July will also be revealed.