Nifty 50, Sensex Flat—What’s Next? All Eyes on Powell’s Jackson Hole Speech

NiftyTrader • August 23, 2024

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Stock market today: Indian stock market benchmarks, the Nifty 50 and the Sensex, closed flat on Friday, August 23, ahead of US Fed Chair Jerome Powell’s address at the Jackson Hole conference later today.

The Sensex closed 33 points, or 0.04 percent, higher at 81,086.21, while the Nifty 50 rose 12 points, or 0.05 percent, to 24,823.15.

“Ahead of Fed Chair Powell’s address, Indian indexes oscillated around a flat trajectory, and mixed global market sentiments fueled this situation. Meanwhile, investors are being cautious and waiting for Powell’s signals for further information on the interest rate path,” said Vinod Nair, Head of Research at Geojit Financial Services.

The domestic market lacks new catalysts. While a 25 basis point Fed rate decrease in September is reasonably priced, the market’s premium valuations and India Inc.’s lackluster Q1 results appear to have limited the upside.

The Nifty 50 has ended in the green for seven straight sessions, with five of those sessions resulting in gains of less than 0.5%. Overall, the index has gained 2.8% throughout this time period. Strong retail participation has kept the Indian stock market up this month, despite international portfolio investors dumping Indian assets.

On Friday, the Nifty Midcap 150 index declined 0.5 percent, while the Smallcap 250 index rose 0.12 percent. Nifty Auto rose 1.12% among the sectoral indexes, finishing as the only sectoral gainer. Nifty Realty fell 2.43 percent to finish as the biggest loss among sectoral indexes, followed by the Media and IT indices, which each fell 1%.

Bajaj Auto (up 4.74%), Coal India (up 1.70%), and Bharti Airtel (up 1.59%) were the top gainers in the Nifty 50 index. In contrast, LTIMindtree (down 1.27 percent), Wipro (down 1.16 percent), and ONGC (down 1.01 percent) were the index’s biggest losers.

According to Jatin Gedia, a technical analysis analyst at Sharekhan by BNP Paribas, the Nifty’s upward trend seems somewhat overstretched. It has gained without a major retreat to the hourly moving averages.

“The hourly momentum indicator shows a negative crossover and divergence.” As a result, an intraday dip is possible, thus long positions should be exercised with caution. The Nifty is also trading at the 78.6 percent retracement level of 24,830, which will limit additional higher. Thus, the general trend stays sideways, with a consolidation range of 24,200 – 25,000,” stated Gedia.

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