Global Factors, Trading By Foreign Investors, Oil Prices To Drive Domestic Markets This Week: Analysts

Analysts noted that this week will mark the September month Futures and Options (F&O) expiry, which will add to the volatility in the market.

Over the last week, the BSE benchmark Sensex dipped 1,829.48 points or 2.69 per cent, while the NSE Nifty declined 518.1 points or 2.56 per cent.

Analysts stated that global trends, foreign investors’ trading activity, and fluctuations in the oil benchmark Brent crude will drive domestic markets in the week. The domestic equity markets declined nearly 3 per cent last week and are further expected to face volatile trends as monthly derivatives expire on Thursday, experts noted. 

This week will mark the September month Futures and Options (F&O) expiry, which will add to the volatility in the market, said Santosh Meena, head of research at Swastika Investmart Ltd., as reported by PTI. 

Commenting on the decline in the markets, Amol Athawale, vice president - technical research at Kotak Securities Ltd., said, “Concerns like rising crude oil prices, firm US dollar index, and treasury yields coupled with continuous FII selling have been denting the sentiment in the markets.”

Further, Arvinder Singh Nanda, senior vice president at Master Capital Services Ltd., elaborated on the global factors that will drive the market in the week and said, “Global and domestic macroeconomic data, trend in global stock markets, crude oil prices, movement of rupee against the dollar, investment by FIIs (Foreign Institutional Investors) and DIIs (Domestic Institutional Investors) will be in focus. Market will take further cues from some key events such as the US GDP data, UK GDP and Eurozone inflation.”

Over the last week, the Bombay Stock Exchange (BSE) benchmark Sensex dipped 1,829.48 points or 2.69 per cent, while the National Stock Exchange (NSE) Nifty declined 518.1 points or 2.56 per cent. Friday marked the fourth consecutive session in a downward trajectory for the markets. These movements were driven by a major fall in HDFC Bank, weak global cues, and significant selling by foreign institutional investors, the report noted. 

Meena added that the global markets are facing ‘challenges’, especially after the Fed announced it’s ‘ultra-hawkish’ Federal Open Market Committee (FOMC) policy. 

Shrikant Chouhan, head of research (retail) at Kotak Securities Ltd., noted, “While the FOMC kept key interest rates unchanged in their recent meeting, the markets reacted negatively to the US Fed's hawkish stance on interest rates. Crude prices remain elevated.”