The key developments to be watched out for the upcoming week will range from developments around the West Asia conflict, crude oil prices and the US Fed interest rate decision. Quarterly earnings would also drive investors’ sentiments in the market.
West Asia crisis:
The escalating war in the will be closely monitored by the investors.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said, “the spike in Brent crude following the escalation of the conflict in West Asia is becoming a concern since it will again impact India’s macros if the price spike lasts longer. If crude price declines and stabilises FPIs are likely to turn consistent buyers in India. Therefore, crude price is the data to watch.”
US Fed policy meeting:
The US Federal Reserve’s policy meeting will be keenly watched this week with the markets overwhelmingly expect policymakers to leave interest rates unchanged. However, the recent surge in energy prices has prompted some investors to question whether inflation risks could remain elevated for longer.
Foreign investors:
Foreign Portfolio Investors continued to be big sellers in markets like South Korea and Taiwan.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said, “FPI equity investment through 24th July stands at Rs 14945 crores, of which Rs 3167 crores is through exchanges and Rs 11778 crores is through the primary market. Debt inflows continue to be robust. This is partly in response to the debt taxation reforms announced by the government.”
“During this month, so far, FPIs continued to be big sellers in markets like South Korea and Taiwan. This weakening of the chip trade is positive for India.
US 10-year bond yield:
The rise in the US 10-year bond yield to 4.7% is largely negative for equities. This might slightly impact FPI flows to emerging markets.
Last week, the BSE benchmark Sensex tanked 2,091.68 points, or 2.67 per cent, and the NSE Nifty declined 566.85 points, or 2.32 per cent.