Week Ahead

Nifty 50 and Sensex closed the week ended September 2 with marginal losses after the US Federal Reserve Chief Jerome Powell reiterated the central bank's commitment to rein in runaway inflation and suggested that another 75-basis-point rate hike at the upcoming meeting may be warranted.

Adding to the muted sentiment was lower-than-expected growth in India's GDP in June quarter at 13.5 percent year-on-year against Street's expectations of more than 15.5 percent growth.

In the coming week, lack of immediate domestic triggers will likely see Indian markets move in tandem with their global counterparts. “Given the absence of major domestic events, Indian market sentiment will be influenced by its global counterparts to determine its movement.

Where benchmark indices faltered in previous week, midcap and smallcap indices continued their winning streak. The Nifty Midcap 100 and Nifty Smallcap 100 posted positive returns in the previous week despite global concerns as investors are increasingly favouring both the segments of the market over largecaps. The optimism for the domestic economy has resuscitated investor interest in smallcap and midcap stocks, which are expected to outperform next week.

Technically On the weekly scale, The Nifty 50 index has seen a formation of bullish candlestick pattern as the closing was higher than opening levels. For traders now, the 20-day SMA (simple moving average) and 17,450 would be the important support zone while 17,700 could act as a major hurdle for the market.