Weekend Wrap: Equity markets close higher for third week in row as Nifty surges above 25,000-mark

Weekly market wrap: Indian equity markets stretched the winning spree for a third week on a row on the back of strong buying by the FIIs and positive cues from the global markets. The Nifty 50 and Sensex both surged considerably. The Nifty rose 1.7 per cent while Sensex rose 1.6 per cent on a week-on-week (WoW) basis. The Nifty 50 index repeatedly scaled fresh record highs throughout the week to finally close beyond the psychologically key 25,000 mark.

Broader market performance and sectoral highlights

Broader markets were mixed. The BSE Midcap Index too aligned with the benchmark, up 1.5 per cent WoW. However, the BSE Small Cap Index trailed and gained just 0.6 per cent WoW.

Positive global cues, especially dovish comments by US Federal Reserve Chair Jerome Powell in the annual Jackson Hole Symposium, supported the momentum in Indian markets. IT was the biggest gainer among all sectors, with the BSE IT Index rising 3.9 per cent WoW. Expectations of a low interest rate environment in the US acted as a catalyst for the rally.

Fund flow and primary market activity

The FIIs were net buyers in the cash market, buying equities worth Rs 23,120 crore. Besides, the DIIs too maintained net buys with a purchase of Rs 4,396 crore during the week. Primary markets also remained abuzz, posting good deals from investors in three mainboard IPOs, all of which saw robust listing gains.

Global market and geopolitical developments

This saw geopolitical tensions flare-up in the Middle East and Eastern Europe, pushing crude oil prices higher from last week's lows. Yet, the majority of major global equity markets ended the week in the black. The Nasdaq and S&P 500, the technology-heavy U.S. equity benchmarks, headed into Thursday, August 29, were down 2.0 percent and 0.8 percent, respectively.

Corporate Developments

• Procter & Gamble Hygiene & Health Care reported 9.3 per cent YoY top-line growth in Q1 FY24 though its net profit contracted 46.4 per cent YoY.
• Alembic Pharmaceuticals received USFDA approval for generic Betamethasone Valerate Foam.
• Lemon Tree Hotels signed licensing agreements for new hotels in Ayodhya and Ujjain.
• While PNC Infratech emerged as the lowest bidder for the Rs 380 crore highway project in Uttar Pradesh and Bihar.

Other key highlights Indian markets next week will react to the following key macroeconomic data: India's Q1 FY25 GDP, Core Sector data for July 2024 and GST collections for August 2024. Auto stocks may be in focus as companies report their monthly sales numbers. Stocks-specific actions are also expected as investors have been advised to create accumulation in high-quality stocks on market dips.

Technically, the Nifty index would test the levels of 25,600 and 25,800 in the near term, and the support, now, has moved higher to the zone of 24,900-24,850, SBI Securities said in a research note. Continuous sectoral rotation, more precisely strength in IT, Pharma, and Healthcare sectors, could support the upward momentum of the market in the coming sessions.