The coming week will be crucial for the Indian stock market as global developments, US interest rate signals, industrial output data, and foreign investment trends are expected to drive market sentiment. In his speech at the Jackson Hole symposium, US Federal Reserve Chairman Jerome Powell hinted at a possible interest rate cut.
This triggered a strong rally in US markets during the last trading session, and analysts believe the positive momentum could spill over into Indian equities when markets open on Monday.
Experts say that a rate cut in the US could help reduce foreign institutional investors’ (FIIs) outflows from India.
Lower US interest rates usually weaken bond yields and the dollar, making emerging markets like India more attractive for foreign investors. Last week, FIIs sold shares worth Rs 1,559.51 crore in the Indian market, while domestic institutional investors (DIIs) were net buyers with purchases worth Rs 10,388.23 crore.
Adding to this, India’s Index of Industrial Production (IIP) data will also be released next week, providing insights into the performance of the country’s industrial sector. The figures are closely tracked by investors and have a direct impact on market sentiment. The previous week closed on a strong note for Indian markets. The Nifty rose 238.80 points, or 0.97 per cent, to end at 24,870.10, while the Sensex gained 709.19 points, or 0.88 per cent, to close at 81,306.85.
The rally was broad-based, with gains seen across large-cap, mid-cap, and small-cap stocks. The Nifty Midcap 100 jumped 1.99 per cent or 1,125.50 points to 57,629.75, while the Nifty Smallcap 100 surged 2.12 per cent or 372.05 points to 17,919.50.
Among sectoral indices, Nifty Auto emerged as the top gainer last week, climbing 5.02 per cent. realty rose 3.45 per cent, consumption 3.01 per cent, FMCG 1.98 per cent, IT 1.74 per cent and metal 1.73 per cent. Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, said that the recent rally was largely driven by S&P Global Ratings upgrading India’s outlook, which boosted investor confidence. He added that Prime Minister Narendra Modi’s announcement of upcoming GST reforms before Diwali further strengthened market sentiment.
