The BSE Sensex was down by 0.21% to close at 59,015.89 on Friday, giving up most of its early morning gains and retreating from all-time highs. Metals, Pharma, PSU Bank, and select FMCG and IT stocks weighed down the market. During the week, Sensex & Nifty gained by 1.20% each. Deferment of AGR dues by the government had boosted sentiment for Telecom sector, Vodafone Idea gained 20% in last week.
Next week, investors will be closely watching the meetings of central banks across the globe, including the Federal Reserve, Bank of England and Bank of Japan with officials in the US expected to give an update on the timing of the bank's asset purchase tapering.
FIIs/FPIs have invested Rs. 20.83 billion in August 2021 and Rs. 112 billion in September 2021. Foreign Institutional Investors (FIIs) Derivative Statistics have shown a rise in the open interest across stock options, and stock futures. Implied volatility (IV) fell for call options and for put options in the last week. Fall in IV for put option and rise in IV for call option shows steady support for Nifty at present levels.
Wallstreet indices closed on negative note on Friday as investors turned cautious ahead of a highly anticipated FOMC meeting next week when the Fed is expected to provide more details on the tapering timeline. During the week, Dow Jones fell marginally by 0.07%, Nasdaq declined by 0.70%, and S&P 500 fell by 1%.
European indices have followed negative market cues from US and closed lower on Friday, tracking losses on Wall Street as economic uncertainty persists while rising inflation would put pressure the Fed to step back easy policies. During the week, FTSE fell by 0.94% and DAX declined by 0.76%.
Brent crude prices touched two-month high of USD 76 per barrel due to lower-than-expected oil production from US and acceleration in vaccination across the globe boosted the sentiment for crude oil. During the week, Brent crude prices gained by 3.32%.
Gold prices closed at USD 1750 an ounce level on Friday, booking a 1.9% fall on the week, amid a dollar surge ahead of the FOMC meeting next week. The bullion dropped for a second consecutive week as traders await more details from the Fed next week on when tapering will begin.
Global Economy
The Eurozone current account surplus widened to EUR 30.2 billion in July 2021, from EUR 26.1 billion in the same month last year, as the services surplus increased, and goods surplus declined. The Eurozone trade surplus narrowed to EUR 20.7 billion in July 2021, from EUR 26.8 billion in the same period last year. Exports rose 11.4% and imports grew at 17%.
Industrial production in the United States increased 0.4% in August 2021 after moving up 0.8% in July 2021. Late-month shutdowns related to Hurricane Ida held down the gain in industrial production by an estimated 0.3% point.
US crude oil inventories fell by 6.422 million barrels in the week ending 10th September 2021, a sixth period of decline and compared with market forecasts of a 3.544 million drop, data from the EIA Petroleum Status Report showed.
The number of Americans filing new claims for unemployment benefits rose to 332,000 in the week ending 11th September 2021 from a pandemic low of 312,000 reported last week due to a combination of unfavourable seasonal and a surge in applications delayed by Hurricane Ida.
Japan posted a trade deficit of JPY 635.36 billion in August 2021, compared with market consensus of a gap of JPY 47.7 billion and reversing from a surplus of JPY 227.98 billion in the same month a year earlier. Exports rose by 26.2% to JPY 6,606 billion while imports rose at a steeper 44.7% to JPY 7,241 billion.
