Indian Stock Markets Driven by Global Factors Amid Lack of Local Triggers
Analysts predict that Indian stock markets will be primarily influenced by global factors in the upcoming week, as there is a dearth of local triggers and the earnings season is nearing its end.
Crude Oil Prices, Rupee Movement, and US Federal Reserve Meeting Minutes to Impact Market Sentiment
The market sentiment in Indian stock markets will also be affected by fluctuations in crude oil prices, rupee movement, and the release of the US Federal Reserve meeting minutes. These global factors will play a crucial role in determining the market trend in the coming week, according to Ajit Mishra, SVP – Technical Research at Religare Broking Ltd.
Volatility and Recovery in Indian Stock Markets
Despite a subdued start, the Indian stock markets witnessed volatility during the week, followed by a gradual recovery that not only reduced losses but also helped the index close around the week's high, as highlighted by Mishra.
Positive Week for Indian Stock Markets with Strong Macroeconomic Data
Indian stock markets concluded the previous week on a positive note, with the frontline indices gaining more than one percent. The Sensex settled at 72,426.64 points, while the Nifty closed at 22,040.70 points. The robust macroeconomic data, including a three-month low of 5.1 percent in retail inflation for January, contributed to the positive performance.
The Banking Sector Boosts Indian Stock Markets
Investor confidence in a rate cut from the US Federal Reserve increased due to a decline in US retail sales. Additionally, expectations of a disinflation trend in the eurozone and higher consumption demand in China after the New Year holidays further bolstered the Indian stock markets. The banking sector witnessed heavy buying, helping the broader indices reach new heights and offsetting the initial concerns over elevated valuations and higher exchange margin requirements.
Outlook for Indian Stock Markets
Analysts anticipate a correction in PSU banks due to higher valuation risks. However, sectors such as metals, FMCG, and capital goods are expected to gain momentum driven by robust construction demand, an order backlog, rural revival prospects, and India's narrowing trade deficit, according to Vinod Nair, Head of Research at Geojit Financial Services.
New Listings and IPOs to Create Activity in Indian Stock Markets
The Indian stock markets will witness increased activity in the coming week due to several new listings and initial public offers (IPOs) planned for the mainboard and SME segment. Juniper Hotels IPO is scheduled to open for subscription on February 21, while GPT Healthcare IPO will open on February 22 in the mainboard segment.
Release of US Federal Reserve Meeting Minutes
Furthermore, the minutes of the US Federal Open Market Committee meeting held on January 31 to February 1 will be released on February 22. This release will provide market participants with valuable insights into the discussions and decisions made during the committee meeting.
Analyst comment
Neutral news: Indian stock markets are expected to be driven by global factors as there are no significant local triggers. Crude oil prices, rupee movement, and US Federal Reserve meeting minutes will also influence market sentiment. Previous week saw gains due to robust macroeconomic data, including lower retail inflation. Correction in PSU banks is likely, while sectors like metals, FMCG, and capital goods are expected to gain momentum. Market activity will also be influenced by new listings and IPOs. Minutes of the US Federal Open Market Committee meeting will be released on February 22.
