Is Nifty50 preparing for a new high soon? Key factors influencing Dalal Street now

Domestic equity benchmarks ended a choppy session largely unchanged on Monday as buying interest in IT, energy, and metal shares was offset by selling pressure in metal, and auto counters. Globally, investors awaited the release of minutes of the FOMC's last review due this week for more clarity on interest rates in the world's largest economy amid expectations the US economy would dodge a recession and cooling inflation would kick off a cycle of rate cuts.

The Sensex ended 12.2 points lower at 80,424.7 while the Nifty50 settled at 24,572.7, up 31.5 points, or 0.1 per cent, from its previous close.

At the end of the day, Hindalco, Shriram Finance, Bharat Petroleum Corp, Tata Steel, LTIMindtree, Coal India, Dr Reddy's, TCS, ONGC, and NTPC - closing between 1.5 per cent and 4.0 per cent higher - rose the most among the 31 gainers in the Nifty50 basket. On the other hand, Mahindra & Mahindra, Bajaj Auto, IndusInd Bank, Axis Bank, SBI Life, Tata Consumer, Bharti Airtel, Nestle India, ICICI Bank, and Tata Motors - declining between 0.8 per cent and 2.6 per cent for the day - were the top losers. 

ICICI Bank, M&M and Bharti Airtel were the biggest drags on the headline indices, whereas heavyweights like TCS and Tata Steel saved them from deeper losses.

Here are some of the key factors at play at the current juncture on Dalal Street: 

• Largely positive earnings season: Dalal Street is in the last leg of the April-June corporate earnings season, with only 15-odd companies left to report their quarterly numbers till September 2. A majority of companies registered revenue growth in the June quarter over the corresponding period a year ago, data shows.
• Positive US economic data, recession fears fading: Last week's data on inflation the world's largest economy has somewhat eased concerns about a recession, with all eyes now on headlines from the annual Jackson Hole Symposium event due this week.
• Hopes of faster & bigger rate cuts in US: US CPI reading released during the week was better than analysts' expectations, supporting bets of imminent reductions in benchmark interest rates in the economy. At its last scheduled review, the Fed Chair-led FOMC kept the key lending rates on hold but hinted at a potential cut in the next meeting scheduled for September.   
• Crude oil below $80 a barrel: Global oil benchmark Brent futures remained below the psychologically important $80 per barrel mark on Monday amid concerns over demand in top oil importer China. Lower crude oil prices are positive for markets like India, which meets more than four-fifths of its annual oil requirement through imports.  
• Easing geopolitical concerns: Many analysts view the absence of fresh escalation in the ongoing Israel-Iran conflict as a positive for global markets at this time. 
• FIIs turning bullish; DIIs remain net purchasers: FIIs turned net buyers of Indian equities last Friday following three straight days of selling. Provisional data shows net purchases of about Rs 767 crore by FIIs on Friday after they took out Rs 9,383 crore in the previous three sessions, while DIIs remained net purchasers for the 10th session in a row, with Rs inflows of Rs 2,606 crore on August 16, according to provisional exchange data. 
• Positive global markets; Dow within 2% of fresh high: The Dow Jones Industrial Average - one of the three main Wall Street gauges - added 96.7 points (0.2 per cent) to end at 40,659.8 last Friday, less than 720 points from an all-time high of 41,376 notched in mid-July. 

A new high in the making on Dalal Street?

Many experts believe Indian equities are poised for a fresh peak in the next few weeks.

Market guru Anil Singhvi sees a high probability of a fresh lifetime high on Dalal Street by the first week of September. 

Dalal Street typically remains in a bullish mode near Ganesh Chaturthi, he said on Monday.

With inputs from agencies

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