Global Trends, Foreign Investors’ Activity To Drive Markets This Week: Analysts

Analysts stated that markets have reached record highs owing to the latest positive news regarding the economy, such as the GDP growth rate of 7.6 per cent logged in the September quarter.

Investors remained confident that US economic growth would pick up in the second half of 2024, and a normalisation in the monetary policy can be anticipated.

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Global trends and foreign investors’ trading activity would majorly drive the equity markets in the week, amid a lack of major domestic triggers, analysts said. Experts stated that markets could face near-term consolidation owing to surged valuations. 

Santosh Meena, head of research, Swastika Investmart Ltd, noted, “ While the previous week was predominantly shaped by developments in the US Federal Reserve policy, attention will now shift to the Bank of Japan's policy decision on December 19,” reported PTI. Further, factors like crude oil prices and macroeconomic data from the US and China would impact market dynamics, Meena added. 

Prashanth Tapse, senior VP (research), Mehta Equities Ltd, said, “Due to overbought technical conditions, the benchmarks may consolidate in the near term. However, that said, the near-term outlook for the markets continues to be in favour of the bulls.”

Further, analysts stated that markets have reached record highs owing to the latest positive news regarding the economy, such as the GDP growth rate of 7.6 per cent logged in the September quarter, the manufacturing PMI rising to 56, Brent crude reducing to $76 per barrel, and foreign portfolio investors (FPIs) becoming net buyers. 

Notably, the BSE benchmark climbed 1,658.15 points or 2.37 per cent, while the Nifty50 gained 487.25 points or 2.32 per cent. On Friday, the Sensex increased 969.55 points to close at a record high of 71,483.75, while the Nifty rose 273.95 points to settle at peak of 21,456.65. 

Vinod Nair, head of research, Geojit Financial Services, said, “The market surged to new highs, buoyed by positive indicators from both domestic and global fronts. Robust domestic industrial production and manufacturing PMI, coupled with the RBI's positive remarks on India's GDP forecast, contributed to the bullish trend. The ease in US bond yield and expectation of multiple rate cuts by the US Fed in 2024 further fuelled market optimism.”

Investors remained confident that US economic growth would pick up in the second half of 2024, and a normalisation in the monetary policy can be anticipated, Nair added. He stated that a near-term consolidaiton in the market owing to surging valuations and concerns over El Nino is expected.