Markets Ahead: US Fed's Interest Rate Decision, Foreign Flows, And Global Trends To Drive Trading

Further, the Bank of Japan (BoJ) is also scheduled to reveal its monetary policy going ahead in the week. The inflation data from Japan is set to be released on Friday

Analysts pointed out that this rate cut could act as a major trigger for the global markets, specifically for emerging markets such as India.

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Investors in the week would be driven by the interest rate decision from the US Federal Reserve, scheduled to be released mid-week, analysts noted. The experts said that other factors such as macroeconomic data in the global markets and foreign investors’ outlook would also be keenly observed by the stock market.

The domestic equity markets clocked bullish sentiments last week as both key equity benchmarks, Sensex and Nifty, soared to touch fresh all-time peaks on Thursday. The BSE Sensex made a record on Thursday and surpassed the 83,000 level for the first time.

Sharing the outlook for the coming week, Santosh Meena, Head of Research, Swastika Investmart Ltd, noted, “One of the most anticipated events of the year is set to unfold this week with the US Federal Open Market Committee (FOMC) meeting scheduled for September 18th. It is almost certain that this will mark the beginning of an interest rate cut cycle in the US. The general consensus is for a 25 basis points (bps) rate cut, though some market participants are speculating a more aggressive 50 bps cut,” reported PTI.

The analyst pointed out that this rate cut could act as a major trigger for the global markets, specifically for emerging markets such as India. This would result in reduced US yields and a weaker currency in turn bringing in funds from foreign investors in the Indian equities, Meena said.

Further, the Bank of Japan (BoJ) is also scheduled to reveal its monetary policy going ahead in the week. The inflation data from Japan is set to be released on Friday.

Palka Arora Chopra, Director, Master Capital Services Ltd, stated, “The outlook for the market will be guided by the major domestic and global economic data such as India's WPI inflation, US industrial production, US Fed interest rate decision, US FOMC economic projections and US initial jobless claims.”