Mumbai: Analysts anticipate that global trends will wield considerable influence over the trajectory of the Indian stock market this week, with local developments taking a backseat as quarterly results are already in. Key factors driving market sentiment include fluctuations in crude oil prices, currency movements of the rupee, and statements emerging from the US Federal Reserve meeting.
Ajit Mishra, Senior Vice President (Technical Research) at Religare Broking Limited, emphasized the significance of global cues, stating, “The quarterly results of companies will play a significant role, but global cues will largely influence market movements in the upcoming week,” in an interview with news agency PTI.
Despite fluctuations, the previous week culminated in gains for domestic markets, with major indexes witnessing an uptick of over 1 per cent. The Sensex closed at 72,426.64 and the Nifty at 22,040.70, buoyed by robust macroeconomic data. Notably, retail inflation dipped to a three-month low of 5.1 per cent in January, providing further support to market sentiment.
Vinod Nair, head of research at Geojit Financial Services, attributed the market’s resilience to favorable macroeconomic indicators, particularly the decline in retail inflation. Heavy buying in the banking sector also bolstered major indices, propelling them to new heights despite varied trends in other Asian markets.
Amidst growing expectations of a Federal Reserve policy rate cut fueled by a downturn in US retail sales, the market is also buoyed by anticipation of increased demand in China.
While historical market patterns may appear reminiscent, each occurrence unfolds with nuanced differences, presenting challenges in identifying market peaks. Despite the Nifty nearing the 22,130 level for the third time, weekly momentum indicators have shifted to a sell signal for both the Nifty and Smallcap index. Furthermore, the Nifty Smallcap 100 index’s consecutive lower close suggests a divergence in indices, warranting cautious market navigation.
