The direction of the Indian stock market will be largely decided by global cues in the trading week starting from Monday, September 28. Factors like US-Iran tension in the Middle East, high crude oil prices and increase in bond yields will affect the market sentiment. According to the trading calendar of NSE, the stock markets will remain closed on Friday, October 2 on the occasion of Mahatma Gandhi Jayanti. Last week, the longest weekly decline in the last six years was recorded in the Indian stock market. Rising crude oil prices have raised concerns about bond yields and inflation. This week, 8 factors can decide the direction of the market… 1. America-Iran tension: Geopolitical tension affects crude and rupee. Iran said that the dispute with America and Israel will be resolved only through talks. However, tension has increased due to President Trump’s rejection of the proposal to open the Hormuz Route. The Iranian Foreign Minister said that this route, which is the main lifeline of the world’s oil trade, will open only when the conditions are met. According to experts, if an agreement is reached between the two countries, India’s oil import bill will reduce and the rupee will get relief. If the tension continues, there will be turmoil in crude oil and Indian stock market. 2. Oil Prices: Brent Crude $105, Inflation Concern Crude oil prices remain a major concern for Indian markets. According to experts, Brent crude remaining near $105–106 per barrel is not good for the economy. Progress in US-Iran talks could lead to a fall in oil prices, while supply disruptions would increase inflationary pressure. 3. FII Activity: Buying in primary market, selling in cash segment. Selling phase by foreign portfolio investors i.e. FIIs continues. FIIs have sold a total of ₹25,682 crore through the cash market till August 25. However, FIIs continue to have faith in the primary market i.e. IPO and they have invested ₹ 8,551 crore in the primary market during this period. According to market experts, this trend may continue due to the rise in bond yields in America and better returns in the Indian IPO market. FIIs may be selling in large-caps, but they are buying in mid- and small-caps. 4. Macroeconomic data: Industrial production data will be monitored. Industrial Production (IIP) data and HSBC Manufacturing PMI data for the month of August will be released this week. According to experts, the market will keep an eye on the country’s industrial production and fiscal deficit data for August. 5. Bond Yields: With US 10-year yield near 5.2%, equity investors will keep an eye on global bond yields. Experts say that the US 10-year treasury yield is currently near 5.2%, which is a cause of pressure for the global market. Global bond yields will remain under watch after the Federal Reserve’s September policy decision. If yields and the dollar rise, capital outflows from emerging markets may increase. 6. Rupee movement: Rupee had closed at 95.75 against the dollar. In the last trading session, the rupee had strengthened by 24 paise and closed at 95.75 per dollar. According to experts, demand for dollars from oil companies and FII selling may remain under pressure on the rupee. However, RBI intervention has helped in controlling the volatility. 7. US Economic Data: Consumer Confidence and Jobs Data Economic data coming from America will be important for global market sentiment. This week, US Consumer Confidence, JOLTS Job Openings and Eurozone September Inflation data will be released. These data will help in deciding the direction of global interest rates. 8. IPO Market: 20 companies will raise ₹ 1,292 crore. A total of 20 IPOs will open in the primary market this week, which are preparing to raise a total of ₹ 1,292 crore. In the mainboard segment, SRIT India, Vishal Nirmiti, Nityas Gems & Jewelery and Shah Investors Home will together raise ₹595 crore. Whereas in the SME segment, 16 SME companies plan to raise approximately ₹697 crore from the market. On Friday, Sensex had climbed 315 points and closed at 73896. On the last trading day of last week, Friday 25th September, the stock market was bullish. Sensex closed at 73,896, up 315 points. Nifty also gained 77 points, it closed at 23,141.
Source link
[ad_3]
Expected movement in the stock market this week: 8 factors like US-Iran tension and crude oil price will decide the movement of the market.
