Weekly market update, Aug 26, 2022

India’s stock indices snapped five-week winning streak, dragged by losses in information technology and pharma stocks, ahead of much anticipated address by U.S. Federal Reserve Chair Jerome Powell at the Jackson Hole annual economic symposium. A strengthening dollar index and increase in global crude oil prices also acted as a headwind for the markets. Domestic equity indices S&P BSE Sensex and Nifty 50 fell over 1% while the broader indices outperformed their larger peers with both Midcap and Smallcap Index rose 0.61% and 0.85% respectively. On the sectoral front, S&P BSE Consumer Durables was the top gainer of the week which rose 2.12% followed by S&P BSE PSU and S&P BSE Capital Goods which gained 1.91% and 1.41% respectively. S&P BSE  IT fell the most by 4.15% due to worries over Indian margin pressure.

Analysts expect that domestic equity markets will remain under pressure in the coming week because there is a sharp sell-off in the US market after hawkish commentary by Fed chairman Jerome Powell. The direction of global markets will be the dominant factor for the coming week while on the domestic front, India’s GDP numbers and August month auto sales numbers will be important factors. Apart from this, the market will also have an eye on movement in crude oil prices, the dollar index, and US bond yields.

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