Global Trends, Currency Movements To Drive Markets, Say Analysts

Market sentiment would be dominated by crude oil prices, movement in the Indian rupee, and the meeting minutes from the US Federal Reserve scheduled to be released in the week, the experts said

Global factors will majorly drive the Indian stock markets this week, as the earnings season ends, analysts stated. Market sentiment would be dominated by crude oil prices, movement in the Indian rupee, and the meeting minutes from the US Federal Reserve scheduled to be released in the week, the experts said. 

Commenting on the stock market behaviour last week, Ajit Mishra, SVP - Technical Research, Religare Broking Ltd, said, “With the earnings season behind us, global cues would largely dictate the trend in the coming week. Markets traded volatile in the continuation to the prevailing consolidation phase but managed to edge higher. The beginning was subdued, however, gradual recovery in the following sessions not only pared losses but also helped the index to close around the week's high,” reported PTI.

The domestic markets ended trading on a high note in the last week owing to strong macroeconomic data. Both the key equity benchmark indices gained over a per cent, and the Sensex and Nifty50 closed at 72,426.64 and 22,040.70 respectively. 

Vinod Nair, Head of Research,Geojit Financial Services, said, “Heavy buying in the banking sector helped broader indices inch towards new heights, countering the subdued beginning of the week characterised by concerns over elevated valuations and higher exchange margin requirements. The indices continued their resilient rally, unlike other Asian peers, buoyed by weaker-than-expected inflation data.”

Nair added that investors anticipated a cut in interest rates from the US Fed as the country’s retail sales dipped. “Moreover, a disinflation trend in the eurozone and expectations of increased consumption demand in China after the New Year holidays provided further support. Looking ahead, a correction in PSU banks seems likely due to higher valuation risks. Meanwhile, sectors such as metals, FMCG, and capital goods are anticipated to gain momentum driven by robust construction demand, an order backlog, rural revival prospects, and India's narrowing trade deficit,” he stated. 

Giving the outlook for the week, the experts said that markets would remain active owing to several new listings and initial public offerings (IPOs) scheduled.