Macroeconomic Trends To Drive Market Movements This Week: Analysts

Experts said that any major domestic triggers are not expected in the week, and foreign investors’ trading activity with global crude oil prices will impact the movement in the market. 

During the last four months, as of November 15, 2023, FPIs collectively sold stocks worth Rs 83,422 crore through the exchanges, analysts said.

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Analysts noted that global trends will majorly dictate the stock market movements this week. Experts further said that any major domestic triggers are not expected in the week, and foreign investors’ trading activity with global crude oil prices and the fluctuations in the rupee and dollar will impact the movement in the market. 

Expecting a consolidation period in the face of a lack of clear global cues, the market direction would possibly depend on the changes in the US bond yields, the dollar index, crude oil prices, along institutional flows, reported PTI. Santosh Meena, head of research, at Swastika Investmart Ltd, noted, “The market's stability may be influenced until the conclusion of state elections, at which point a discernible trend might materialise.”

Notably, foreign portfolio investors have recently been selling the Indian equities since August. During the last four months, as of November 15, 2023, FPIs collectively sold stocks worth Rs 83,422 crore through the exchanges, V K Vijayakumar, chief investment strategist at Geojit Financial Services, said. 

The analyst added that domestic institutional investors (DIIs) dumped stocks worth Rs 77,995 crore from August to November 15, 2023. “This is the reason why Nifty is around 19700, the same level which it was in early August,” Vijayakumar noted. 

Arvinder Singh Nanda, senior vice president, Master Capital Services Ltd, further said, “The market will focus on global and domestic macroeconomic data, US bond yields, crude oil inventories, FII (Foreign Institutional Investors), DII (Domestic Institutional Investors) investment trend, movement of the rupee against the dollar.”

Nanda noted that the markets will also be influenced by the US existing home sales, initial jobless claims, US manufacturing and services PMI, Federal Open Market Committee (FOMC) meeting minutes, and UK manufacturing and services PMI. 

Notably, US inflation data, which was muted compared to estimated, and softening bond yields have led to optimism in equities. The benchmark indices gained during last week’s market sessions, where the BSE benchmark increased 1.37 per cent, and the Nifty rose 1.57 per cent. 

Giving an outlook for the week, Ajit Mishra, SVP - technical research at Religare Broking Ltd, noted, “Global cues are largely dictating the trend and we expect this trend to continue in the coming week as well. All key sectors, barring banking, participated in the move and posted strong gains wherein IT, realty, and auto were the top gainers. The broader indices maintained their buoyancy and the midcap index also reclaimed its record high after two months.”