US Federal Reserve Rate and Tariffs Expected to Impact Market This Week: Analysts
Analysts predict that this week’s movement in the equity market will be influenced by a variety of factors, including the US Fed interest rate decision, global trends, tariff-related developments, and the trading activity of foreign investors. Key macroeconomic data points to watch out for include the announcement of WPI inflation for February on Monday.
Vinod Nair, Head of Research at Geojit Financial Services, highlighted the persistent uncertainties surrounding global trade and concerns about a potential US recession as factors that could impact market momentum. Despite these uncertainties, he noted that recent corrections have led to a moderation in valuations. Additionally, factors such as falling crude oil prices, a weakening dollar index, and expectations of improved domestic earnings in the coming months may help stabilize the market amidst ongoing trade tensions.
China’s upcoming retail sales growth and industrial production data releases are also expected to provide insights into the country’s economic outlook. Investors will also keep a close eye on US retail sales and production numbers, as well as the Bank of England’s interest rate decision.
Global trade tensions and fears of a US recession weighed heavily on investor sentiment last week, leading to a 0.7 per cent decline in the Nifty-50. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, anticipates the market to remain range-bound this week with some volatility and sector rotation driven by global market trends and developments in US tariff policies.
Last week, the BSE benchmark Sensex fell by 0.67 per cent, while the NSE Nifty dipped by 0.68 per cent. Prashanth Tapse, Senior VP at Mehta Equities Ltd, noted that investors are cautious due to concerns about potential tariffs on Indian goods imposed by the Trump administration and its wider implications. This caution may lead to a negative bias in the market for some time.
