Analysts Expect Foreign Investors’ Trading, Fed Rate Hike Fears To Drive Equity Markets This Week

Analysts noted that movements in global oil benchmark Brent crude and the rupee’s reaction against the dollar will impact the market.

The upcoming Jio Financial Services' listing in the market is also expected to leave an impact.

Source : Getty

Global trends and foreign investors will drive the domestic equity market this week. According to analysts, with the first quarter earnings season almost over, the Indian market will be impacted by the trading activity of foreign investors.

Movements in global oil benchmark Brent crude and the rupee’s reaction against the dollar will impact the market, analysts noted. Further macroeconomic indicators like global stock market trends and activities by foreign institutional investors will drive the market in the week, reported PTI.

Elaborating on foreign factors driving the market, Master Capital Services Ltd.’s senior vice president Arvinder Singh Nanda, said, “The market will react to some key global events such as the US existing home sales, initial jobless claims, and Eurozone S&P global composite PMI.”

Motilal Oswal Financial Services Ltd.’s head of retail research, Siddhartha Khemka, also stressed that the upcoming speech by US’s banking regulator and Jio Financial’s upcoming listing will also leave an impact. He added, “With Fed Chair Jerome Powell's speech and more macro data lined up globally this week, we expect domestic as well as global markets to remain under pressure. Also, RBI would release its meeting minutes on Thursday. However, action is likely to continue in the broader market along with sectorial rotation. Index heavyweight Reliance would be in focus as Jio Financial Services is set to be listed on Monday.”

Notably, the Indian indices felt the impact of adverse global and domestic cues, prompting the investors to edge towards safer bets like the US dollar. Vinod Nair, head of research at Geojit Financial Services noted, “Discouraging domestic industrial production, negative wholesale inflation, and elevated CPI inflation contributed to market volatility.  Additional strains emerged from stronger-than-expected US retail sales data; adding to Fed rate hike fears, concerns about US bank rating downgrades, and a sudden Chinese central bank rate cut hindered recovery and sustained selling pressure. Escalating US bond yields are predicted to restrict foreign investments in India, further impacting market dynamics.”

Last week saw the BSE fall by 0.57 per cent, while the Nifty declined by 0.60 per cent.