Indian stock markets are all set for the upcoming week. Global and domestic factors are giving contrasting signals. Analysts highlight that US Federal Reserve’s interest rate decision, inflation data and foreign institutional investments (FIIs) are the main catalysts for market movement.
FII flows the big factor
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said,”FIIs turning buyers in December after relentless selling in October and November has contributed to the recovery in the market from the November lows. FIIs have bought equity for Rs 14435 crores through exchanges till 13th December. The total buy figure including the exchange buying and buying through the ‘primary market and others category’ stood at Rs 22765 crores as on December 13 (NSDL).”
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Pravesh Gour, Senior Technical Analyst at Swastika Investmart, notes that global trends, especially the Fed’s policy decisions, will heavily influence Indian markets. He said, “Domestic indicators like inflation will also play a key role in shaping sentiment.”
However, there are concerns about foreign investments leaving the market, along with the impact of rising crude oil prices and the rupee’s exchange rate.
Vinod Nair, Head of Research, Geojit Financial Services said, “A gradual recovery in IIP and core sector data is pointing towards a better H2 earnings performance compared to subdued H1 FY25. Currently, it is believed that FII selling has subsided, at least in the short to medium term, which will add further impetus to the sentiment.”
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Inflation watch
The major focus will be on the release of the Wholesale Price Index (WPI) inflation data on Monday, which could either help stabilize the market or make it more uncertain.
Ajit Mishra, SVP of Research at Religare Broking, pointed out that while a 25 basis point rate cut by the Fed is expected, its commentary on future policy will be critical.
Last week, the BSE benchmark rose 623.07 points (0.76 per cent), and the Nifty gained 90.5 points (0.36 per cent). Investors will now look for cues from global and domestic data, but with so many uncertainties,
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