It’s big week for the markets. Though holiday shortened, the street will watch out for cues from upcoming elections and FII activity. The continuous selling by FIIs has been one of the big worries for the market.
FIIs have been on a consistent selling spree for over a month,. So far in November, foreign portfolio investors have sold over Rs 27,000 crore. This follows an outflow of nearly Rs 1 lakh crore in October.
Global trends and oil prices to influence markets
In addition to FII flows, global oil prices and the movement of the rupee-dollar exchange rate will be crucial factors for market watchers. With Brent crude remaining a key global benchmark, any sharp movements in oil prices could impact India’s inflation outlook and trade balance, further affecting investor sentiment.
Holiday-shortened week and market volatility
Equity markets were closed last Friday for Guru Nanak Jayanti, and will also remain closed on November 20 for the elections, creating a shortened trading week. With the earnings season largely concluded, the focus will shift back to FII flows and global market trends. Ajit Mishra, SVP of Research at Religare Broking, stated that with FIIs continuing their selling spree, investors will be closely monitoring the outcome of the elections, as well as global developments, especially US economic data like unemployment claims, PMI figures, and inflation data from Japan.
Market outlook
The Sensex and Nifty have taken significant hits recently, with the Sensex falling by 1,906 points last week and losing over 9.7 per cent from its all-time high. Despite the sharp pullback, analysts remain cautious, pointing to the volatile nature of the market driven by both domestic and global factors. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, emphasized that markets are likely to remain volatile in the short term, with the rising dollar index and continued FII selling creating headwinds for the Indian equity market.
As the week progresses, foreign investor activity, global economic trends, and oil price movements are likely to be key factors that will guide market sentiment and investor behavior.
