In the absence of any major developments on the domestic front, the direction of the stock markets this week will be decided by the global trend and the activities of foreign investors. Analysts have expressed this opinion. They said that due to the settlement of monthly derivative contracts, some volatility may be seen in the market this week. Last week, the local stock markets witnessed a record rise after the US central bank Federal Reserve cut the key interest rates by 0.50 percent.
Santosh Meena, Head of Research, Swastika Investmart Ltd, said that historically, interest rate cuts in the US have had a positive impact on emerging markets and India has emerged as a favorite destination among global investors. He said that foreign institutional investors (FIIs) made aggressive purchases during the week. On Friday alone, FIIs invested more than Rs 14,000 crore in the Indian stock markets. He said, “There is no major indicator to guide the market this week. However, the US macroeconomic data will be important for the market.
Last week on Friday, the 30-share BSE Sensex closed at an all-time high of 84,544.31 points with a jump of 1,359.51 points or 1.63 percent. During the day’s trading, it climbed 1,509.66 points or 1.81 percent to reach its all-time high of 84,694.46. Similarly, on the same day, the National Stock Exchange’s Nifty closed at a record 25,790.95 points, up 375.15 points or 1.48 percent. During the day’s trading, the Nifty reached an all-time high of 25,849.25 points with a gain of 433.45 points or 1.70 percent. Last week, the Sensex was up 1,653.37 points or 1.99 percent. On the other hand, the Nifty jumped 434.45 points or 1.71 percent.
Also read: SBI, HDFC, ICICI, PNB or UCO, which bank is providing car loan at cheaper interest rate, what will be the monthly EMI
What do experts say
FII flows will remain an important factor for the Indian stock market, along with domestic institutional flows will also be watched closely. Meena said, “Although the market does not seem to be affected by geopolitical risks at the moment, it can pose a big threat to the market in the future. There may be volatility in the market due to derivative settlement.”
Siddharth Khemka, Head of Research (Asset Management), Motilal Oswal Financial Services, said, “The market is gradually moving up. We expect its positive momentum to continue this week as well due to strong FII inflows, healthy domestic macro factors and decreasing concerns about a slowdown in the US economy.” Analysts say the movement of the rupee against the US dollar and fluctuations in the prices of global oil benchmark Brent crude will also affect the market direction.
Religare Broking Ltd. Senior Vice President-Research Ajit Mishra said, “Although the major event of the Federal Reserve cutting interest rates is over, everyone’s focus will remain on the US for the direction of the market going forward. Apart from this, investors will also keep an eye on the flow of foreign funds and fluctuations in crude oil prices.”
