Investors will keenly observe the trading activity of foreign players, trends going on in the world economy, and the current earnings results for cues regarding the sentiment in the market. Analysts noted that the benchmark equity indices could further continue to witness consolidation in the week.
The trading week remains shortened due to the upcoming festival of Diwali amid the monthly derivatives expiry, reported PTI. Last week, the markets plunged sharply due to foreign capital outflows and poor earnings reported in the second quarter so far.
Experts noted that this weakness could further stay in the near term as investors exhibit caution ahead of the US presidential election scheduled for next month. The markets are scheduled to observe a holiday for Diwali on Friday, however, the exchanges will remain open for a special trading window for one hour in the evening.
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Traditionally, the BSE and NSE hold a special ‘Muhurat Trading’ session for an hour on Diwali. This will be held on November 1 this year and will mark the start of the new Samvat 2081.
Vinod Nair, Head of Research, Geojit Financial Services, explained, “We expect the consolidation to continue in the short term. A reversal in trend will depend on a slowdown in FIIs' selling intensity and the outcome of the US presidential election.Going forward, FII flows will play a crucial role in determining market direction, while volatility is expected to rise in anticipation of the October F&O expiry.”
Globally, macroeconomic data is scheduled to be released in the week including the GDP data, China’s PMI manufacturing data, the US jobs report, US core PCE prices index, among others. The Bank of Japan is also set to reveal its interest rate decision on Thursday. Major earnings lined up include Adani Ports, Dabur India, Adani Enterprises, BHEL, and Adani Power.