Global trends, macroeconomic data, trading activity of FPIs key factors to drive market sentiments

New Delhi: Movement in the stock market this week will largely be driven by global trends, macroeconomic data announcements and trading activity of foreign investors, analysts said.

Equity benchmark indices, which are on a dream run for the past several days, will also track trading in global oil benchmark Brent crude and movement of rupee against the US dollar.

"The next FOMC (Federal Open Market Committee) meeting is scheduled for mid-September, but before that, the market will be closely watching upcoming US economic data. Key indicators like manufacturing PMI, non-farm payrolls, and unemployment rate will be released this week, all of which could significantly influence market sentiment.

"Institutional flows will play a critical role," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

The primary driver behind the bullish momentum in the domestic market is the growing anticipation of a rate cut in the United States and buying support from domestic investors.

Auto stocks would remain in the limelight amid sales data announcement.

"We expect the market to continue its northbound journey with stock-specific action. Global macro data which will be released during the week will continue to provide cues to domestic equities," Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

Last week, the BSE benchmark jumped 1,279.56 points or 1.57 per cent, and the Nifty soared 412.75 points or 1.66 per cent.

In nine days of rally, the BSE benchmark surged 1,941.09 points or 2.41 per cent. The Nifty zoomed 1,096.9 points or 4.54 per cent in 12 sessions.

"Benchmark indices scaled new highs in a positive trading session on the back of broad-based buying support, as hopes of a rate cut by the US Fed next month after last week's Jackson Hole meeting has made investors more confident. However, caution may prevail and profit-taking could make a comeback as the market has been on an upward march for the last 12 trading sessions," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

On Friday, the 30-share BSE Sensex climbed 231.16 points or 0.28 per cent to settle at an all-time closing high of 82,365.77. During the day, it jumped 502.42 points or 0.61 per cent to hit a record intra-day peak of 82,637.03.

In its best winning streak since its launch in 1996, the Nifty soared 83.95 points or 0.33 per cent to hit a new lifetime closing high of 25,235.90, taking its victorious run to the 12th day in a row. During the day, it surged 116.4 points or 0.46 per cent to hit a new record intra-day peak of 25,268.35.

"Nifty ended higher on Friday for the twelfth consecutive session, its best winning streak since its launch in 1996. Global shares mostly rose Friday as markets continued to be moderately optimistic about the prospects of technology companies helped by the prospect of lower interest rates amid signs of moderating inflation across the developed world," said Deepak Jasani, Head of Retail Research, HDFC Securities.