Markets to Take Cues from Global Trends and FII Activity
As the earnings season draws to a close, stock markets are poised to take cues from global trends and foreign institutional investors’ (FII) trading activity. Analysts are closely monitoring these factors to gauge the market’s direction this week. The US Federal Open Market Committee (FOMC) minutes will be a significant highlight, and traders will also keep a watchful eye on institutional flows and crude oil price movements.
The recent global market rally, triggered by easing fears of a recession in the US, has been a significant development. Positive economic data, such as cooling inflation and robust retail sales numbers, have helped to alleviate recession fears. Additionally, talks of a rate cut by the US Federal Reserve as early as next month have further fueled the market rally. This positive sentiment has led to a surge in global equities, including the Indian market.
The 30-share BSE benchmark jumped 1,330.96 points or 1.68% to settle at 80,436.84 on Friday, marking its best single-day gain in more than two months. The NSE Nifty surged 397.40 points or 1.65% to close at a two-week high of 24,541.15. This significant gain is a testament to the market’s resilience and its ability to adapt to changing economic conditions.
The outlook for the market will be guided by the FOMC meeting minutes, US existing home sales and new home sales data. Analysts are optimistic that the market will consolidate in a broader range and take cues from global factors. The uncertain geopolitical situation remains the primary near-term risk for the market, and traders will need to navigate this uncertainty to make informed investment decisions.
Santosh Meena, Head of Research at Swastika Investmart Ltd, emphasized that this week there are fewer cues on the macro and micro fronts, as the Q1 earnings season has concluded. However, important global economic data, such as Japan’s inflation numbers and the minutes from the US FOMC meeting, will be closely watched. Meena added that traders will also closely monitor institutional flows and crude oil price movement.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, highlighted the positive impact of US economic data on the global market. He noted that cooling inflation and robust retail sales numbers have helped to alleviate recession fears, leading to a global market rally. Tapse also pointed out that talks of a rate cut by the US Federal Reserve as early as next month have further fueled the market rally.
The market’s performance last week was also noteworthy. The BSE benchmark jumped 730.93 points or 0.91%, while the Nifty climbed 173.65 points or 0.71%. This momentum is expected to continue, provided the market remains resilient to geopolitical risks and takes cues from global economic trends and FII activity.
In conclusion, the market’s performance this week will depend on several key factors, including the FOMC meeting minutes, US economic data, and FII trading activity. Analysts are optimistic that the market will consolidate in a broader range and take cues from global factors. Investors and traders should remain vigilant and make informed decisions based on these cues to navigate the market’s volatility.