Market Ahead Podcast, Sep 1: Top factors that could guide markets today

Dalal Street investors are advised to exercise caution on Wednesday as the astounding rally clocked yesterday could face hiccups in sessions ahead.

Bouts of volatility could be on cards as phase-IV of Sebi's peak margin norms kick in today. As per the rules, intra-day traders will have to pay 100 per cent upfront margin instead of 75 per cent asked previously.

Besides, traders taking intra-day positions will be the most impacted since in the earlier system margins were calculated on end-of-the-day basis. Now, margin requirements will be calculated four times every session bringing even intraday positions under the ambit.

Given this, while some analysts expect trading volumes to take a hit over the next few days, they expect normalcy to return soon as the first three legs of this rule are already in place.

First leg of this peak margin rule was implemented in December 2020 with a 25 per cent upfront margin money payment rule. Later on it was increased to 50 per cent and 75 per cent in the next two legs of this peak margin rule. So, traders and brokers, they say, are well prepared.

Business Standard spoke to Deven Choksey, managing director at KR Choksey Investment Managers to understand the implications of the move. Listen in

Clearly, while sustenance of the market rally could be challenging from here, a host of other factors may keep traders on the edge on Wednesday.

Markets will first react to the GDP growth data for the June quarter of FY22, followed by assessment of Manufacturing PMI data for the month of August, slated to be released later today.

That apart, auto stocks will also be in focus today as the automobile companies are set to report their August sales figures.

Further, in the primary market, two public issues -- Vijaya Diagnostic and Ami Organics will open for subscription.

Analysts have neutral to avoid ratings on Rs 1,895 crore IPO by Vijaya Diagnostics as they believe the issue seems to be fully priced at Rs 531 per share. Meanwhile, they are mixed on Ami Organics, with ratings ranging from Neutral to Subscribe. The company looks to raise Rs 570 crore.

Lastly, stock-specific news flow, oil price moves amid Opec+ meet and global markets will also sway market sentiments.

On Tuesday, the S&P BSE Sensex ended above the 57,000-mark for the first time, at 57,552, as it zoomed 663 points on the BSE. The Nifty50, meanwhile, settled above 17,100 level on the back of 199 points' gain.