The direction of India’s stock market next week will be decided by developments related to macro economic data, geopolitical developments and concerns arising from changes related to AI. Analysts have expressed this opinion. However, investors can exercise caution amid the ongoing fluctuations in the stock market. Analysts said that apart from this, business activities of foreign investors and movement of rupee against dollar will also affect the direction of the market. However, last week there was a decline of more than 1 percent in the stock market. Now it will be interesting to see whether there will be a tsunami in the Indian stock market under the shadow of the US-India deal or whether there will be a rise.
Keep an eye on IT and metal shares
Vinod Nair, Head of Research, Geojit Investments Limited, said that with duty concerns easing in the near term and the season of mixed quarterly results of companies on the domestic front coming to an end, the market will mainly depend on global indicators. This includes expectations regarding US labor force figures and the stance of the US central bank. Nair said that the IT and metal sectors are continuously facing structural and external difficulties. In such a situation, market players can turn to banking, automobile and certain consumer consumption based sectors. However, Nair said that unless there are clear macro economic and policy indicators, the major indices will remain in a narrow range. Last week, the 30-share BSE Sensex fell 953.64 points or 1.14 percent, while the National Stock Exchange’s Nifty lost 222.6 points or 0.86 percent.
Manufacturing and Service PMI
Ajit Mishra, Senior Vice President (Research), Religare Broking Limited, said that the market will keep an eye on the wholesale inflation and trade balance data. Key figures such as HSBC Manufacturing and Services PMI, bank credit growth and foreign exchange reserves figures will also be important. He said that the stock market improved to a great extent last week due to the India-US trade agreement and fresh inflow of foreign investors in risk appetite. Nair said that global cues and the strengthening of the rupee gave impetus to the market. However, due to mixed results of the third quarter, profit booking was also seen. Also, due to increasing concerns regarding changes related to AI, there was selling in the global market, due to which a sharp decline was also seen in IT stocks.
pressure on rupee
On Friday, the rupee strengthened within a limited range and closed at 90.66, falling five paise against the US dollar. Geopolitical tensions also affected market sentiment. US employment data has reduced expectations of future interest rate cuts by the Federal Reserve. Analysts said that unless there are clear macroeconomic and policy signals, the major indices are expected to remain in a narrow range.