Global Market Outlook: Importance of Global Cues and FIIs for the Week ahead
This week, keep an eye on the global market trends and the activities of foreign institutional investors (FIIs) as they are expected to influence the domestic equity market, according to analysts. The results of the assembly polls in Maharashtra and Jharkhand could also impact stocks on Monday.
There was a significant recovery in the stock market on Friday, with the Sensex and Nifty posting their best single-day gains in over five months, providing some relief after a period of correction.
Santosh Meena, from Swastika Investmart Ltd, highlighted that the outcomes of the Maharashtra and Jharkhand elections will be important factors to watch. The one-sided victory in Maharashtra for the NDA is likely to boost bullish sentiment, but global concerns, such as tensions between Russia and Ukraine and rising crude oil prices, continue to pose risks.
The direction of FII flows remains crucial following recent corrections, as a strengthening US dollar index and high US bond yields have led to significant outflows. The recent political outcomes in Maharashtra and Jharkhand have positive implications for sectors related to infrastructure development and political stability, as Palka Arora Chopra from Master Capital Services Ltd pointed out.
Global factors, like US economic data and the FOMC meeting minutes, will play key roles in shaping investor sentiment. Additionally, the performance of the Indian stock market will also be influenced by triggers like the global oil benchmark Brent crude and the rupee-dollar trend.
Recent market trends have shown gains, with most sectors contributing to the rebound, except for energy. IT and banking sectors played a significant role in driving the recovery, with realty, auto, and FMCG sectors leading the pack.
Looking ahead to the start of the week, Siddhartha Khemka, from Motilal Oswal Financial Services Ltd, noted that the market will respond to the state assembly election results in Maharashtra and Jharkhand, along with global triggers such as developments in the Russia-Ukraine conflict.
Overall, it will be important to follow global cues, FII activities, and political outcomes to gauge the market sentiment this week.
