Business Activity in New Zealand's Services Sector Logs Sixth Straight Month of Contraction in August

The NZX 50 plunged 123 points or 1.0% to 12,710 in early deals on Monday, halting gains in the prior two sessions, as traders profit-taking after the index hit a new record high Friday ahead of the release of the GDP data later this week.

Traders were cautious as the Reuters poll showed the country's GDP to return to contract by 0.3% QoQ in Q2, after growing 0.2% in Q1.

Domestically, the fresh data revealed New Zealand's services sector shrank for the 6th straight month in August despite being at a softer pace.

Traders anticipated the Fed and the PBOC interest rate decisions later this week.

However, a positive session in the US market Friday capped the falls after Wall Street closed higher, lifted by raising bets of a larger interest rate cut at the Fed's meeting this week.

Almost all sectors traded in the red, including healthcare, financial, and consumer staples, with notable losses from Fisher & Paykel (-2.5%), Westpac Banking Corp (-1.6%), Infratil (-1.5%), and Ebos Group (-1.0%).

Sudeep Shah of SBI Securities believes the Nifty 50 is likely to continue its northward journey and test 25,600-25,650 levels, followed by 26,000 in the short term.

On the downside, 25,200-25,160 will act as immediate support for the index followed by 24,900, according to Shah.

Shah is bullish on PVR INOX and Tech Mahindra, recommending for next week. "PVR INOX has recently emerged from an extended consolidation phase and has started gaining traction in the current series, while Tech Mahindra has formed a bullish candle on the weekly chart with a long lower shadow, signaling buying interest at lower levels," said the Head of Technical and Derivative Research at SBI Securities with over 17 years of experience.

Will Nifty surpass 26,000 mark before witnessing significant correction?

Last week, the benchmark index Nifty dipped to 24,753 before resuming its upward trend and achieving a new peak. The support came from a gap zone created in early August, which had previously acted as a resistance, resulting in the creation of a formidable swing low in that area.

However, it was on the weekly expiry day when Nifty witnessed strong momentum from its 20-day EMA (Exponential Moving Average) zone of 24,900-24,950 & index kept on crossing all resistances to create a new life high above 25,400. This was on the back of a strong move from the largecaps along with FII's massive buying to the tune of Rs 7,695 crore, a number which was not seen in the recent past.

This sudden move on Thursday even led to a significant short-covering in the Call Options and on weekly closing has nullified the Bearish Engulfing pattern observed at the end of the previous week on the weekly charts.

The main event in the coming week for the global markets would be the Monetary Policy Announcement by US Fed scheduled on September 18 with traders closely tracking the Fed commentary and the roadmap going forward.

We believe the index is likely to continue its northward journey and test the level of 25,600-25,650, followed by 26,000 in the short term. On the downside, the zone of 25,200-25,160 will act as immediate support for the index followed by 24,900.

Do you see Bank Nifty hitting record high in the current month?

Bank Nifty in the previous week took support at its 100-day EMA closer to 50,300 level & witnessed a strong rebound on the back of positive momentum in largecap banks such as ICICI Bank and HDFC Bank.

It ended the week above the 51,900 mark, posting a 2.69 percent gain and forming a large Bullish Engulfing candlestick on the weekly chart. This breakout above the previous swing high suggests a robust bullish trend going ahead.

Looking ahead, the index is expected to continue its ascent, targeting levels of 52,800 and then 53,300 in the short term. On the downside, support has now moved up to the 51,400-51,350 range.

Will Wipro surpass the recent high (July high) in September?

In the past week, Wipro emerged as the top-performing frontline IT stock, gaining 5.76 percent and forming a significant bullish candle on the weekly chart. The RSI (Relative Strength Index) momentum indicator has closed above 60 on both the weekly and daily timeframes, signaling that the uptrend is likely to persist. Given the strong momentum in the IT sector, Wipro is expected to surpass its previous swing high of Rs 579, achieved on July 19, and potentially reach levels of Rs 595-600 in the short term. Support on the downside is seen at Rs 524.

Your top two bets?

PVR INOX

The stock has recently emerged from an extended consolidation phase and has started gaining traction in the current series. On Friday, the stock saw a significant surge accompanied by strong volumes. The RSI momentum indicator on the daily timeframe is currently at 72. Additionally, the stock has broken above its 200 EMA on the weekly timeframe during this series. We recommend accumulating the stock within the range of Rs 1,648-1,656, with a stop-loss set at Rs 1,580. In the short term, the stock is expected to test levels of Rs 1,760 and potentially reach Rs 1,800.

Tech Mahindra

In recent sessions, IT stocks have shown impressive performance, with Tech Mahindra standing out. After hitting a low of Rs 1,162 in April 2024, the stock has begun a trend of progressively higher peaks and troughs, accompanied by increased volume. It has formed a bullish candle on the weekly chart with a long lower shadow, signaling buying interest at lower levels. The RSI on the weekly timeframe is at its highest since December 2021, reflecting strong momentum. We recommend accumulating Tech Mahindra shares within the range of Rs 1,648-1,658, with a stop-loss set at Rs 1,587. In the short term, the stock is expected to test levels of Rs 1,740 and potentially reach Rs 1,780.

Do you see sharp run up in Piramal Enterprises after reading charts?

In Friday's trading session, major NBFC stocks experienced significant gains, with the Bajaj Twins leading the way. Piramal Enterprises also saw a breakout on the daily charts, supported by above-average volumes. This breakout occurred after 12 days of sideways consolidation. The stock has now been trading at its highest levels since June 25, 2024. As long as the stock remains above Rs 1,060, it is likely to gradually move towards Rs 1,230 level.

Is the Voltas looking overbought?

Voltas has seen an extremely sharp rally over the course of the past few weeks. The stock has managed to close in the green for the past five weeks. The stock has rallied from Rs 1,418 to Rs 1,921 in just 24 trading sessions. The uptrend remains intact as long as the sequence of higher tops and higher bottoms sustain. However, the momentum indicators and oscillators portray different pictures. The weekly and daily RSI is in an extremely overbought zone.

These technical factors indicate that the index may slid into the period of consolidation before making another higher high. Talking about levels, the zone of Rs 1,740-1,760(20 EMA) will act as immediate support for the index. As long as the index is trading above Rs 1,740 level, it is likely to trade with the positive bias.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

The Tadawul All Share Index started the week 0.49% higher as investors digest the country's August inflation rate report.

According to the Saudi Exchange data, the bourse closed Sunday trading at 11,900.30 points, with 138 shares in the green and 80 in the red. The session was led by Saudi Fisheries (SASE:6050) and Amlak International Finance (SASE:1182), which closed 9.93% and 7.59%, respectively.

According to the General Authority for Statistics, the country's annual inflation rate for August climbed to 1.6%, compared with 1.5% in June and July. Meanwhile, the August wholesale price index increased year over year to 3.2% in August from the 3.1% uptick in July.

"Actual housing rents increased by 10.7% in August 2024, influenced by the increase in apartment rental prices by 10.8%. The increase in this category had a significant impact on maintaining the annual inflation rate for August 2024, given the weight this group represents (21.0%). Similarly, food and beverage prices increased by 0.9%, influenced by a 4.6% rise in vegetables prices. Prices of restaurants and hotels also rose by 1.6%, affected by a 1.6% increase in catering service prices," the statistics agency said in its report.

On the corporate front, Etihad Atheeb Telecommunication (SASE:7040) shares closed 2.38% higher as it agreed to purchase a 51% stake in Ejad Tech in an 86.7 million-Saudi-riyal deal. Under the four-month memorandum of understanding, the company intends conduct talks for a final deal, as well as obtain approvals from regulatory authorities and shareholders.

Meanwhile, Fourth Milling sets the price range for its initial public offering at between 5 riyals and 5.3 riyals. The real estate developer will sell 162 million shares, with the institutional book-building period beginning on Sunday and finishing on Thursday.