The markets are expected to consolidate further while global investors will be keenly watching out US Federal Reserve’s decision on interest rates and the North Korean crisis amid heightened tension. Last week, the Indian markets shrugged off the missile launch in Japan by North Korea and posted best weekly gains in two months.
Nagaraj Shetti, technical research analyst, HDFC Securities, said the Nifty is still holding below the key hurdles and there is a possibility of further upward movement, and it may hit new an all-time high in the coming weeks. “Maximum upside levels to be watched for next week could be around 10,150-10,180 levels, but there is an equal chance of Nifty showing top reversal pattern at the highs, in the next 1-2 weeks,” he said.
As foreign institutional investors (FIIs) have been selling in India this week, global liquidity will depend on the outcome of the two-day Fed meeting on Wednesday. The central bank is unlikely to raise interest rates this time. It has already hiked rates twice this year. The most central theme of Fed chief Janet Yellen’s speech will be plans of restoring the US central bank’s $4.5 trillion portfolio. According to Reuters, the US Fed is widely expected to announce plans to begin unwinding its $4.2 trillion portfolio of treasuries and mortgage-backed securities in its latest step toward monetary policy normalisation, nearly a decade after the global financial crisis.
On the geopolitical crisis front, comments by the US on North Korea may elevate the situation. The US ambassador to the United Nations, Nikki Haley, said on Sunday the United Nations Security Council has run out of options on containing North Korea’s nuclear programme and the US may have to turn the matter over to the Pentagon, reported Reuters. As world leaders head to the UN headquarters in New York for the annual General Assembly meeting this week, Haley’s comments indicated the US was not backing down from its threat of military action against North Korea, the report said.
Back home, action in the primary market continues. Dixon Technologies and Bharat Road Network will make their stock market debut on Monday.
The initial public offering (IPO) of consumer electronics manufacturer Dixon Technologies’ which was open from 6-8 September with a price band of Rs1,760-1,766 per share, was oversubscribed 117.83 times.
Bharat Road Network’s IPO with a price band of Rs195-205 was oversubscribed 1.81 times during the share sale from 6-8 September.
This week, two IPOs will hit the markets to raise about Rs8,882 crore. Subsidiary of the country’s largest lender, SBI Life Insurance will open its share sale between 20-22 September at a price band of Rs685-700 per equity share. It aims to raise up to Rs8,400 crore.
Indore-based snacks maker Prataap Snacks’s IPO will open for subscription on 22 September with a price band of Rs930-938 per equity share. The company, which makes products under ‘Yellow Diamond’ brand, plans to raise Rs482 crore through the IPO.