Powell’s Jackson Hole speech, FII activity among 8 key triggers to move market this week

Markets closed higher for the second straight week, with the Nifty 50 and Sensex gaining close to 1%. Optimism around a possible GST rate overhaul lifted sentiment early on, and momentum held through most of the week before some profit booking in the final session pared gains. By the end of the week, the Nifty stood at 24,870.10, while the Sensex settled at 81,306.85.

The rally was fueled mainly by domestic policy signals, with expectations of GST rate changes boosting investor appetite. Sentiment was further lifted after S&P upgraded India’s sovereign credit rating. However, caution lingered as mixed geopolitical cues and uncertainty over policy rates ahead of US Federal Reserve Chair Jerome Powell’s Jackson Hole address prompted profit-taking.

After a steady run-up, Nifty paused on Friday, suggesting a brief consolidation before the next leg higher. The index continues to hold above the 50 EMA, reinforcing the short-term uptrend. On the downside, support lies at 24,800; staying above this level keeps the trend intact with scope for an advance towards 25,000–25,250.

Factors that are likely to impact movement when markets reopen this week:

1. Fed Chairman’s dovish stance: The market reaction to the dovish undertone from the US Fed Chairman Jerome Powell’s Jackson Hole remarks will remain one of the key triggers.
   
2. Geopolitical developments: On the global front, geopolitical developments around the August 27 tariff deadline are also likely to impact the market.
   
3. Domestic data: Investors will likely monitor domestic data releases closely, including the HSBC Manufacturing, Services, and Composite PMIs, along with the key IIP and GDP prints, which will serve as critical indicators of economic momentum.
   
4. Technical triggers: Technically, the Nifty has approached the support zone of its short-term moving average, with the 20-DEMA placed around 24,800.
   

“Sustaining above this level could open the door for a move towards 25,250 initially, followed by 25,400. In case of a decline, it may fill the gap around retest the immediate support near 24,600, with a stronger base around 24,350,” said Ajit Mishra, SVP of Research at Religare Broking.

1. Monthly expiry: The August 28 monthly expiry stands in the coming week. The volatility around the same time may have an impact on the markets.
   
2. FII data: Foreign Institutional Investors (FIIs) continued their selling spree in August, offloading equities worth Rs 25,564 crore through the exchanges up to August 23. This took the total equity selling by FIIs this year up to that date to Rs 1,57,440 crore, according to market data.
   
3. INR moves: The rupee weakened after initially gaining on the GST reduction news, but the momentum faded as persistent FII selling pressure weighed on sentiment. Market focus now shifts to Powell’s speech at Jackson Hole, which is expected to guide the dollar index and thereby influence the Rupee’s direction.
   
4. Crude prices: Crude price movements and global risk sentiment will also play a crucial role in determining near-term trends.
   

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)