Indian equity markets ended lower on Friday as investors remained cautious ahead of U.S. Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium. However, optimism around tax reforms and a recent rating upgrade helped the indices register gains for the week.
The Nifty 50 slipped 0.85% to close at 24,870.10, while the BSE Sensex also shed 0.85% to finish at 81,306.85.
Despite the day’s losses, both benchmarks advanced 1% over the week, supported by strength in automobile and consumer stocks. Investor sentiment improved on expectations of higher demand following amendments to the goods and services tax (GST) and S&P’s upgrade of India’s sovereign rating.
Market Outlook
According to Dharmesh Shah, Vice President at ICICI Securities, the market has extended its winning run for the second consecutive week, aided by GST reform optimism, signs of progress on the Russia–Ukraine front, and the sovereign rating upgrade. While the Nifty 50 added 1%, midcap and small-cap indices outperformed with 2% weekly gains. Auto, realty, and FMCG stocks were the key drivers, while PSU banks underperformed.
Shah highlighted that the formation of higher highs and higher lows along with improving market breadth signals renewed bullish momentum. He expects the Nifty 50 to move towards 25,400 in September, with strong support in the 24,700–24,500 range.
However, he cautioned that the coming week could bring heightened volatility due to the August 27 tariff deadline, monthly derivatives expiry, and GDP data releases. Powell’s commentary from Jackson Hole is also expected to influence sentiment.
On a structural level, Shah noted that the market has shown resilience by defending the 24,500 mark for the past three months despite global headwinds and persistent foreign investor outflows. “This indicates a strong higher base formation that bodes well for the next leg of the rally,” he said.
Market breadth is also improving, with 40% of Nifty 500 stocks now trading above their 50-day moving averages, up from 25% two weeks ago—a technical signal that has historically preceded healthy returns.
Key Factors to Watch
- Developments in bilateral trade negotiations
- GDP readings from both India and the U.S.
Stock Pick of the Week
Shah recommends buying Chalet Hotels in the range of ₹990–₹1,015, setting a target price of ₹1,115 with a stop loss at ₹899.