The upcoming financial policy meeting of the US Federal Reserve and the inflows from Foreign Institutional Investors (FIIs) are currently the main topics of interest. The Sensex and Nifty indices have taken a breather following a sharp rebound in global markets, as investors hope for some relief from recent turmoil in the global banking sector.
On Friday, the Sensex rose by 355.06 points or 0.62 percent to settle at 57,989.90, while the Nifty gained 114.45 points or 0.67 percent to end at 17,100.05. However, fresh market cues are expected next week as the US Federal Reserve prepares to announce its financial policy outcome.
The upcoming US financial policy meeting, scheduled for 21-22 March, is one of the most anticipated events in the financial world as it has an impact on global markets. Despite the recent turmoil in the banking industry and uncertainty, many investors are keenly watching for cues from crude oil prices and the Indian currency, which could play a pivotal role in market movements.
Apart from this, the Japanese inflation rate for February will be announced on 24 March 2024. Inflation is a critical factor in the global economy, and any deviation from expectations could impact markets. The Indian economy has also been impacted by rising inflation and high crude oil prices. With the country heavily dependent on crude oil imports, any change in prices could impact its economy. Investors will also be watching out for the movement in the Indian rupee, which has been unpredictable in recent times.
Ajit Mishra, VP of Technical Research at Religare Broking Ltd, said, “In the absence of any major domestic event, the focus would be on the forthcoming FOMC meet scheduled on March 21-22. Besides, movement in crude and trend of foreign inflows will also be in focus for cues.”
According to Mishra, “Markets may take a breather initially; still, the downside also seems limited. Nifty could face hurdles around the 17,250-17,400 zone while the 16,600-16,800 zone would provide the needed cushion, in case the situation deteriorates further.”
As we’re witnessing a mixed trend across sectors, dealers should continue with a stock-specific approach, with a focus on overnight risk management. Essential stocks could see some stimulation after China’s central bank cut CRR by 25 basis points to stimulate its economy. Realty stocks are seeing buying interest after DLF announced record deals growth. With crude oil trading at a 15-month low, cement, paints, and OMCs would also be in focus.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd, said, “Going ahead, we anticipate a short-term withdrawal in the market as lower US PPI inflation and slower US retail sales data has led to the expectation of a lower 25 bps rate hike in the Fed policy meeting next week. Still, the market structure is not good, and hence dealers should take a conservative stance in advanced situations.”
Investors are hoping for a market recovery, which has been floundering with weak global cues, rising bond yields, and concerns over inflation. The US Federal Reserve has previously announced plans to taper its asset purchases, which could impact markets of the world.
In addition, investors will be closely watching the outcome of the US Federal Reserve financial policy meeting next week. Besides, the movement in crude oil prices and the trend of foreign inflows will also be important factors to watch. Essential, realty, cement, paints, and OMCs are the sectors to keep an eye on. Dealers should continue with a stock-specific approach, with a focus on overnight risk management.
