October 7th 2024.
New Delhi: According to experts, the upcoming week in the market will be heavily influenced by three key factors - the Reserve Bank of India's interest rate decision, the ongoing conflict in the Middle East, and the trading activity of foreign investors. These factors will have a major impact on investors' sentiment and steer the direction of the market.
Apart from these, the market will also be closely watching the quarterly earnings of IT giant TCS, domestic macroeconomic data, and the movement of global oil benchmark Brent crude. These factors will greatly influence the market trends and guide investors' decisions.
The recent escalation of tensions in the Middle East and the outflow of foreign funds were the main reasons behind the sharp decline in equity markets last week. Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, noted that the market will also be keeping an eye on the RBI Monetary Policy Committee meeting, with the outcome expected to be announced on Wednesday, October 9, 2024.
The second quarter earnings season will kick off with TCS, which will be closely watched by investors. Gour also mentioned that domestically, liquidity remains strong and there are signs of sectoral rotation from overvalued segments to areas with more attractive valuations. In addition, factors such as commodity prices, the US dollar index, and key US macroeconomic data will also play a crucial role in determining market direction. The ongoing geopolitical developments will also continue to be a significant factor on the global front, Gour added.
Last week, there was a significant decline in the BSE Sensex, which fell by 3,883.4 points, or 4.53 per cent, and the Nifty, which slumped 1,164.35 points, or 4.44 per cent. Vinod Nair, Head of Research at Geojit Financial Services, pointed out that the new milestones of Nifty50 and Sensex at 26,000 and 85,000, respectively, were short-lived due to the headwinds from the Middle East and the flow of foreign funds to cheaper Asian peers. This led to a correction of more than 4 per cent in these benchmark indices.
In just five days of heavy market correction, investors' wealth eroded by Rs 16.26 lakh crore. Palka Arora Chopra, Director at Master Capital Services Ltd, stated that the outlook for the market will be determined by major domestic and global economic data, including India's interest rate decision, industrial production, US FOMC meeting minutes, initial jobless claims, and UK GDP data.
Ajit Mishra, SVP of Research at Religare Broking Ltd, emphasized the importance of keeping an eye on the developments in the geopolitical situation and its impact on crude prices. He also highlighted the significance of tracking foreign and domestic flows, along with the outcome of the upcoming MPC meeting on October 9, in shaping the market trends.
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