Market Ahead Podcast, Aug 26: Top factors that could guide markets today

Volatility is creeping in the markets as investors are keeping their powder dry ahead of the Jackson Hole Symposium.

The meeting starts today and will run through Saturday, with US Federal Reserve chair Jerome Powell scheduled to deliver his speech on Friday.

There have been expectations that Powell might indicate when the central bank could begin "tapering" or easing stimulus to an economy now recovering from Covid-19.

However, given the rampant spread of the Delta variant of coronavirus in the US, Wall Street analysts believe the Jackson Hole meeting might turn out to be a non-event.

The Fed has always been data dependent and the US August payrolls report due in September will be more important than Jackson Hole, they say.

Moreover, analysts believe there are clear signs the global economy is losing momentum. For instance, Citi's global economic surprise index, which measures the degree to which the data is beating or missing economists' forecasts, turned negative this week for the first time since last June. This means there are more misses than beats on the recovery expectations. The equivalent US and Chinese indices also turned negative some weeks ago.

All these factors further cement the case for pushing back the tapering programme for now.

Against this backdrop, global and domestic investors could stay on the sidelines on Thursday and Friday. That apart, domestically, expiry of the August F&O series may result in a choppy trade today.

Overall, global cues, stock-specific news flow, foreign fund flow, and the movement of the dollar index will decide the market trajectory on Thursday.

Yesterday, the headline S&P BSE Sensex closed at 55,944 levels, down 15 points while the Nifty50 ended at 16,635, up 10 points. Both the indices had hit a new high of 56,188 and 16,712, respectively in the intra-day deals.