September 23rd 2024.
Investors in New Delhi are keeping a close eye on global trends and the trading activity of foreign investors this week, as analysts predict a lack of major domestic triggers. With the monthly derivatives expiry approaching, the markets may experience some volatility.
Last week, the stock markets saw a record-breaking rally, largely driven by the US Federal Reserve's decision to cut interest rates. This move has historically had a positive impact on emerging markets, making India a popular choice among global investors, according to Santosh Meena, Head of Research at Swastika Investmart Ltd.
One of the highlights of the week was the aggressive buying by Foreign Institutional Investors (FIIs), who poured in over Rs 14,000 crore on Friday alone, Meena added. Looking ahead, there are no major triggers expected this week, but upcoming macroeconomic data from the US will be crucial to monitor. The flow of FIIs will continue to be a key factor for the Indian equity market, along with domestic institutional inflows.
However, Meena also noted that despite the markets currently appearing unfazed by geopolitical risks, these factors could pose a threat to the ongoing bullish momentum. As the September F&O expiry approaches, we can expect heightened volatility in the markets, he said.
On Friday, the 30-share BSE Sensex hit an all-time high of 84,694.46, settling at 84,544.31, a jump of 1,359.51 points or 1.63 per cent. The NSE Nifty also closed at a record high of 25,790.95, surging 375.15 points or 1.48 per cent. During the day, both indexes reached all-time intra-day peaks.
Last week, the BSE benchmark and Nifty saw significant gains of 1,653.37 points and 434.45 points, respectively. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, predicts that the positive momentum will continue this week, thanks to strong FII inflow, healthy domestic macros, and a decrease in concerns about the US economy slowing down.
The movement of the rupee against the US dollar and global oil benchmark Brent crude will also have an impact on trading in the markets. Ajit Mishra, SVP of Research at Religare Broking Ltd, believes that although the major event of the Fed's rate cut has passed, all eyes will remain on the US markets for further direction. Additionally, the flow of foreign funds and the price of crude oil will be critical factors for investors to monitor in the coming weeks, as they may influence market direction.
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