INVC NEWS
New York : Amidst a significant downturn in retail sales in the United States, the possibility of a reduction in interest rates in June has heightened investors’ enthusiasm in global markets. With strong local activity buoyed by robust participation from investors, domestic stock markets surged by over one percent last week, keeping a keen eye on the stance of the Federal Reserve, the central bank of the United States, regarding policy rates in the upcoming week.
Key Factors Influencing Market Sentiment
Several factors may influence the market this week. Notable among them are the launch of 2 mainboard and 3 SME IPOs, along with the listing of 7 new shares in the market. As companies begin to release their quarterly results, the earnings season is starting to soften, with most companies having already issued their reports. Investor focus will also remain on FPIs, which maintained a bullish stance last week, with purchases exceeding INR 6000 crores. Additionally, DIIs also made significant purchases amounting to INR 8700 crores.
Impact of External Factors
Throughout the week, some external factors may also affect the market. The minutes from the latest meeting of the Federal Reserve’s Open Market Committee in the United States will be released. After the New Year holidays, many Asian markets, including China, are set to reopen. Prices of dollar, rupee, and crude oil will also have an impact on the stock market.
Market Performance Highlights
Last week, the BSE’s 30-share Sensex index made a significant leap, surging by 831.15 points to close the week at 7242664 points, crossing the psychological level of 72,000 points. Similarly, the Nifty index of the National Stock Exchange (NSE) soared by 258.2 points, reaching 22040.70 points, surpassing the psychological level of 22,000 points.
According to analysts, the banking sector’s strong performance helped the Sensex and Nifty reach new highs, providing support to the market amidst concerns over high valuations and elevated exchange margins, leading to a slow start to the week’s trading.
Market Expectations and Outlook
Contrary to other Asian markets, bullish indicators buoyed by weaker inflation figures in the United States due to a decline in retail sales have boosted investor hopes for a rate cut by the Federal Reserve. Additionally, expectations of increased consumption in China after the New Year holidays have further supported the market.
Market experts suggest that due to concerns over high valuations, there is a possibility of a correction in public sector banks this week. Meanwhile, momentum is expected to increase in sectors such as metals, FMCG, and capital goods, fueled by strong construction demand, order backlogs, rural revitalization prospects, and narrowing trade deficits in India. The easing of tensions and government-led manufacturing initiatives have also contributed to the positive sentiment.
