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Analysts say that in the absence of any major developments at the domestic level this week, stock markets will be largely dictated by global trends. According to analysts, the business activities of foreign investors, global crude oil prices and the position of the rupee against the US dollar will also affect the movement of local stock markets.
“In the absence of clear global cues, market sentiment will likely depend on US bond yields, dollar index and crude oil prices, as well as institutional investments in hopes of consolidation,” said Santosh Meena, head of research at Swastik Investmart Ltd. He said that the market stability may be affected till the assembly elections of five states are over and by then a clear trend of the market may emerge.
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Since August, foreign portfolio investors (FPIs) have been withdrawing capital from Indian markets on a massive scale. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, says that from August to November 15, FPIs have invested Rs. 83,422 crore net sale of shares.
However, during this period Domestic Institutional Investors (DII) contributed Rs. 77,995 crore shares were bought. Buying by individual investors with DII completely neutralizes selling by FPIs. Vijayakumar said buying by DIIs and individual investors has resulted in the National Stock Exchange (NSE) index Nifty once again hovering around 19,700 where it was in early August.
“Markets will focus on global and domestic macro-economic data, US bond yields, crude oil storage, FII and DII investment trends and movement of the rupee against the dollar,” said Arvinder Singh Nanda, senior vice-president, Master Capital Services Ltd. Last week, BSE’s benchmark index Sensex rose 890.05 points or 1.37 percent, while Nifty rose 306.45 points or 1.57 percent.
Last week, except banking, all major sectors participated in the rally and registered strong gains. The broader indices continued their gains and the midcap index also hit its record high after two months. Ajit Mishra, Senior Vice President (Technical Research) at Religare Broking Ltd said, Global cues are largely dictating the trend and we expect this trend to continue in the coming week as well.