Markets week ahead: F&O expiry, IPO, border spat key drivers

India’s benchmark indices remained in a consolidation mood for a third consecutive week, though it managed to end marginally high as mixed global cues combined with lingering India-China border issue weighed on investor sentiment.
The broader market came into the limelight after a Sebi rule mandating multicap funds to invest equally in stocks across market-caps, as there was heavy buying in these pockets during the week. Midcap and smallcap indices gained 2-5%.

Thanks to a net Rs 5,276.50 crore inflow into the Indian equities, foreign institutional investment for the month has come back to the positive territory. In September till now, the equity market has seen an inflow of Rs 1,766 crore from the overseas portfolio investors. Along with debt market inflows, net investment during the month stands at Rs 6,259 crore.

The coming week will see three IPOs opening for subscription to raise a total of Rs 3,160 crore, a portion of which has already been collected from anchor investors. The offers for Chemcon Speciality Chemicals and CAMS will open on Monday while that of Angel Broking will open on Tuesday. Going by grey market interest, the issues are likely to get good buying interest from investors.

The RBI will release loan and deposit growth data for the fortnight ended September 11 on Friday. Traders will also keep an eye on the weekly forex reserve data that will be released on the same day, which will give an indication on the central bank’s stance on dollar buying from the market.
Investors will track any development in dozen-odd Covid-19 vaccine trials that are going on, which if completed successfully, will lead to an eradication of the virus. Meanwhile, India has been reporting nearly a lakh new cases every day, which is a grave concern for authorities.

On the global front, investors will await the Federal Reserve meeting outcome. The two-day meeting is expected to end Wednesday with minor tweaks to Fed’s statement and some clarity on how it plans to use forward guidance. The Fed also updates its economic and interest rate outlook, including forecasts for 2023 for the first time. Retail sales, jobless claims, housing starts, are other key data that will be eyed.

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