Domestic markets next week may be influenced by global cues and foreign fund movement in the absence of any domestic cues and events, analysts said in their expectations. Additionally, markets will also be keeping an eye on the US Fed’s Federal Open Market Committee (FOMC) scheduled next week on September 20-21, 2022, they also mentioned.
In the absence of major domestic data and events, participants will be keeping an eye on the US Fed meeting scheduled for September 20-21, and the foreign flow trend will also remain on their radar, Ajit Mishra, Vice President of Research, Religare Broking said in its expectations for next week.
Similarly, Apurva Sheth, Head of Market Outlook at Samco Securities also said that the FOMC meeting and press conference will be the center of attention next week and globally, the Fed’s decision on interest rates can cause jitters in the markets.
“Given the US Fed’s stance, some people expect even a 100bps rate hike. US markets already faced deep cuts when they reacted to the headline CPI numbers and core inflation for August 2022,” Sheth said on Fed rate hike expectations.
He added that while India has done much better than other major markets, it is expected to remain volatile. Nifty50 on Friday closed the week at 17,530.85 up 1.7 percent.
According to Mishra, “Markets have shown tremendous strength so far amid global turmoil, but lingering fear of aggressive rate hikes by the US Fed has limited upside and also led to intermediate falls. “prevailing market structure, combined with indications from US markets, points to a further decline.”
In technical terms, a breakdown below 17,500 in Nifty could push the index to 17,150 zone, said analyst Religare Broking, adding that in case of any bounce, 17,800-18,100 zone would act as a hurdle .
“We think participants should stay light and hold positions on either side and reiterate the preference for private banking counters, suggesting you use the correction to build up in a staggered fashion. Conversely, IT and pharma give us they look weak and can be considered for short trades.” added Mishra.
Hemant Kanawala, Senior Executive Vice President and Head of Equity, Kotak Mahindra Life said, “As valuation appreciation is limited, future market performance and direction will be driven by earnings update and renewal . As investors wait for clarity on the earnings update and closely monitor the outlook for demand, markets may continue to consolidate in the near term.”
