Global Trends Likely To Affect The Indian Stock Market Scenario This Week, Say Analysts

The direction of the Indian stock markets will be influenced by global trends this week, analysts have predicted. With no significant local developments and most companies already releasing their quarterly results, traders will focus on factors such as crude oil prices, movements of the rupee, and statements from the US Federal Reserve meeting.

In an interview with news agency PTI, Ajit Mishra, Senior Vice President (Technical Research) at Religare Broking Limited, stated, “The quarterly results of companies will play a significant role, but global cues will largely influence market movements in the upcoming week.”

Last week, the market experienced fluctuations, yet ultimately concluded with gains as domestic markets ended positively, buoyed by robust macroeconomic data. Major indexes witnessed an increase of over 1 per cent, with the Sensex closing at 72,426.64 and the Nifty closing at 22,040.70.

The market received additional support from macroeconomic indicators, including retail inflation, which dropped to a three-month low of 5.1 per cent in January. Vinod Nair, head of research at Geojit Financial Services, noted that the indices maintained their upward trajectory unlike other Asian markets, aided by the inflation data. He highlighted heavy buying in the banking sector as a key factor propelling major indices to new heights.

Investor expectations for a Federal Reserve policy rate cut have risen due to the decline in US retail sales. Additionally, the anticipation of increased demand in China has provided further support to the market.

The historical patterns in markets may appear similar, but they are not exact repetitions. Even when similar events occur, they do so with subtle differences, making it difficult to recognize them. Therefore, identifying market peaks, when the madness of crowds is at its height, can be challenging. Currently, the Nifty is nearing the 22130 level for the third time. Despite the Nifty closing higher, the weekly momentum indicators have shifted to a sell signal for both the Nifty and Smallcap index. Additionally, the Nifty Smallcap 100 index has closed lower for the second consecutive week, indicating a divergence in the indices.