Market Sentiment Next Week Hinges on Q2 Earnings, Economic Data, and FII Flows
By Alayaran.com Staff
Mumbai, November 10, 2024 - The upcoming week in the equity markets will be driven by a confluence of factors including macroeconomic data releases, the final batch of Q2 earnings, global trends, and the trading activity of foreign institutional investors (FIIs).
According to Santosh Meena, Head of Research at Swastika Investmart Ltd, key economic data points such as India's CPI and IIP on November 12, WPI on November 14, and the US inflation report on November 13 are expected to significantly influence market movements. "These reports will not only reflect the economic health of India but also guide expectations regarding the Federal Reserve's future policy decisions," Meena explained.
With major global events and Q2 earnings announcements largely concluded, the market's attention is now shifting towards these critical data releases. Companies like Bank of India, BEML, Hindalco Industries, ONGC, Apollo Tyres, and Brainbees Solutions (parent firm of FirstCry) are set to announce their quarterly results this week.
The performance of US bond yields and the dollar index will also play a pivotal role, especially for emerging markets like India, where these metrics have seen an uptick post the US elections. "FIIs' activity will remain a crucial driver for the Indian equity market in the near term," Meena added.
Analysts are also monitoring global oil prices, with movements in Brent crude, and the rupee-dollar exchange rate expected to guide market trends. Palka Arora Chopra, Director at Master Capital Services Ltd, highlighted the importance of additional global economic indicators like UK GDP and China's industrial production data.
Last week, the BSE benchmark fell by 237.8 points or 0.29%, and the Nifty dropped by 156.15 points or 0.64%. "The persistent selling by FIIs has been a major contributor to the market's weakness," noted V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The ongoing exodus of foreign investments continues, with FPIs withdrawing nearly Rs 20,000 crore in the last five trading sessions due to higher valuations of domestic stocks and a shift towards investing in China. This has resulted in FPIs becoming net sellers, with outflows reaching Rs 13,401 crore so far in 2024.
Additionally, the combined market valuation of six of the top 10 most-valued firms eroded by Rs 1,55,721.12 crore last week, reflecting the market's volatility.
Equity markets will remain closed on November 15 for Guru Nanak Jayanti.
With inputs from PTI