Market outlook: Fed interest rate decision, global trends to influence indices this week

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New Delhi: In the absence of any major national macroeconomic data announcement this week, stock markets would closely follow the US Fed’s decision on interest rates and other global trends to decide its further move, analysts said. .

Stock indexes surged to their new lifetime highs on Friday.

Analysts said positive economic data and government reforms in the telecommunications, banking and auto sectors helped bolster market sentiment.

“This week is going to be critical for the Indian market after a recent outperformance as there is some weakness in global markets where the outcome of the FOMC meeting, which is scheduled for September 21-22, will be a critical factor.

Besides the US Federal Reserve, the Bank of Japan will also release its monetary policy on September 22, said Santosh Meena, head (research) of Swastika Investmart Ltd.

The movement of the dollar index and US bond yields will play a key role in the behavior of emerging markets like India, Meena added.

“We are in a roaring bull market and I think this could continue over the next 2-3 years, but after a long time I seem a little cautious as there are signs that a short term correction is imminent. ”Meena said.

Over the past week, the 30-stock BSE benchmark has jumped 710 points or 1.21%. The market benchmark Sensex crossed the 59,000 mark for the first time on Thursday.

“The nervousness would be visible in the market this week ahead of the US Federal Reserve meeting,” said Siddhartha Khemka, manager (retail research) at Motilal Oswal Financial Services Ltd.

Shrikant Chouhan, head of equity research and retail at Kotak Securities Ltd, said the Federal Reserve will launch a two-day meeting on September 21 and global markets will monitor an update to their schedule. purchase of bonds.

According to a note from Samco Research, “Investors around the world will watch the Federal Open Market Committee (FOMC) meeting for clarity on the outlook for both the interest rate cut and the time frame.”

The markets would also follow the movements of foreign institutional investors, the trend of the dollar rupee and Brent crude.

Vinod Nair, head (research) at Geojit Financial Services, said this week the global focus will be on policy meetings of a few central banks, including the Fed.

PTI


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