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The Fed interest rate decision, domestic macroeconomic data announcements and quarterly earnings will be the major sentiment drivers for the equity market in a holiday-shortened week ahead, analysts said. Investors will also take cues from the monthly auto sales numbers to be announced on Monday.

Equity markets will remain closed on Thursday for Diwali Laxmi Pujan and on Friday for Diwali Balipratipada. “Due to the festival of Diwali, markets will have a truncated three-day trading session this week.

“Key events to watch out for this week will be India’s PMI data for October and US Fed meeting which will provide some direction to the market,” Siddhartha Khemka, head (retail research) at Motilal Oswal Financial Services Ltd, said. Selling by foreign funds, weak global markets and mixed earnings weighed on market sentiments last week.

“This is going to be a truncated week on account of Diwali where the market is heading this festival season with a mood of profit-booking. The week will start with auto sales numbers for October where expectations are low, while the market will also gauge the consumers’ sentiments on Dhanteras and Diwali,” Santosh Meena, head (research) at Swastika Investmart, said.

Important earnings are lined up this week including names like HDFC, IRCTC, Tata Motors, Bharti Airtel, HPCL, Sun Pharma, Eicher Motors and SBI, he added. Yesha Shah, head (equity research) at Samco Securities, said, “Although the trading week ahead will be shorter than usual, it can undoubtedly be eventful. The news flow and market sentiment may be largely dominated by the upcoming FOMC (Federal Open Market Committee) meeting.”

Shah added that Indian automakers will report their monthly sales figures. “Despite the advent of the festive season, shortages of semiconductors, rising freight and commodity prices may continue to squeeze margins and weaken sales,” Shah added. Last week, the 30-share BSE benchmark tumbled 1,514.69 points or 2.49 per cent.

“Markets are expected to remain bearish in the short term due to profit-booking across various sectors and weak global cues. The Q2 result season is in progress with the market getting mixed responses from companies declaring their results. Along with the corporate earnings, the market has to deal with macro numbers,” Rahul Sharma, co-founder of Equity99, said.

Vinod Nair, head (research) at Geojit Financial Services, said India’s manufacturing and services PMI data to be released this week will be a key indicator in determining the economic progress for October. “Additionally, decisions of the Fed in its meeting this week will be a major factor that will drive global equities in the coming days,” he added.

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FPIs turn net buyers in Jun; invest Rs 12,714 cr in Indian markets, BFSI News, ET BFSI

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New Delhi: After remaining net sellers for two months in a row, foreign portfolio investors (FPIs) in June turned net buyers by pumping in a net Rs 12,714 crore into Indian markets. Prior to this, overseas investors had pulled out Rs 2,666 crore in May and Rs 9,435 crore in April.

According to depositories data, FPIs invested Rs 15,282 crore in equities between June 1 and 25.

At the same time, FPIs withdrew Rs 2,568 crore from the debt segment.

The total net inflow stood at Rs 12,714 crore during the period under review.

Bajaj Capital Joint Chairman and MD Sanjiv Bajaj said the inflow in June is on account of “favourable global cues and improving outlook for the Indian economy amidst a sharp fall in the number of COVID-19 cases easing of lockdown restrictions in some parts and a pick-up in vaccination.”

India can witness ‘V’-shaped growth revival amid forecast of a normal monsoon, supportive monetary policy, a deleverage balance sheet of the corporate sector and a well-capitalised banking system, he added.

Geojit Financial Services Chief Investment Strategist V K Vijayakumar said, “High delivery volumes in IT (information technology) and metal stocks indicate strong institutional buying.”

Kotak Securities Executive Vice-President (Equity Technical Research) Shrikant Chouhan said that overall, the MSCI Emerging Markets Index gained nearly 1.49 per cent this week.

Except for India and Indonesia, all key emerging and Asian markets have seen FPI outflows this month to date, he further noted.

Indonesia saw month-to-date FPI inflows of USD 363 million. On the flip side, Taiwan, South Korea, Thailand and Philippines saw month-to-date FPI outflows of USD 2,426 million, USD 1,218 million, USD 124 million and USD 64 million, respectively, he said.

Morningstar India Associate Director (Manager Research) Himanshu Srivastava said, “From the long-term perspective, India would attract foreign investments as the macroeconomic environment improves and the domestic economy starts treading on the recovery path.”

So far, the ultra-loose monetary policy stance by central banks globally to support the economy in the aftermath of the coronavirus pandemic had opened flood gates of foreign money into emerging markets like India, he added.

However, the US Federal Reserve‘s hawkish statement dented sentiments and prompted foreign investors to turn cautious, he said.



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