Markets Ahead: Investors Expect Volatility, To Track Global Trends, Foreign Investments

Sharing the outlook, an expert said no major triggers are expected in the week, however, macroeconomic data incoming from the US would be key to monitor for the investors

Foreign investors’ outlook on Indian equities and global trends would be keenly observed by investors in the week, analysts noted. The experts said that markets could experience volatility going ahead as the monthly derivatives expiry nears.

Further, the US Federal Reserve’s rate cut last week triggered a record-breaking rally in the markets, reported PTI. Santosh Meena, Head of Research, Swastika Investmart Ltd, noted, “Historically, rate cuts in the US have had a positive impact on emerging markets, with India being a favoured bet among global investors. The highlight of the week was the aggressive buying by Foreign Institutional Investors (FIIs), who poured in over Rs 14,000 crore on Friday alone.”

Sharing the outlook, Meena said no major triggers are expected in the week, however, macroeconomic data incoming from the US would be key to monitor for the investors. “FII flows will remain a key factor for the Indian equity market, alongside domestic institutional inflows, which will also play an important role. While markets currently seem unfazed by geopolitical risks, these factors could pose a significant threat to the ongoing bullish momentum. As we approach the September F&O expiry, heightened volatility is likely,” the expert commented.

Notably, the equity indices experienced a major rally last week. The BSE Sensex gained 1,359.51 points or 1.63 per cent to close at a fresh peak of 84,544.31 in the last trading session on Friday. Meanwhile, the NSE Nifty soared 375.15 points or 1.48 per cent to end trading on the day at a record 25,790.95. In the last week itself, the BSE benchmark index climbed 1,653.37 points or 1.99 per cent, while the Nifty surged 434.45 points or 1.71 per cent.

Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, stated that markets are gradually recovering and this positive momentum is expected to continue in the week owing to robust FII inflow, healthy domestic economic data, and reduced concern about the slowdown in the US economy.