Markets Ahead: Hopes Of Rate Cut From US Fed, Global Economic Indicators To Drive Investors

Investors in the stock market will be on the lookout for global trends, foreign investors’ outlook, and economic data announcements across the world. Analysts noted that the key benchmark indices would also be influenced by fluctuations in Brent crude and changes in the currencies like rupee and dollar.

The Federal Open Market Committee (FOMC) is scheduled to hold its next meeting sometime in mid-September and this will leave a major impact on markets across the world, the experts stated. However, before that, the US is set to release some key economic data such as manufacturing PMI, unemployment rate, and non-farm payrolls, reported PTI.

Santosh Meena, Head of Research, Swastika Investmart Ltd, elaborated that the economic indicators from the States would influence sentiments in the market. Further, he noted that institutional flows would also play an important role in the week.

Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, explained, “The primary driver behind the bullish momentum in the domestic market is the growing anticipation of a rate cut in the United States and buying support from domestic investors. Auto stocks would remain in the limelight amid sales data announcement. We expect the market to continue its northbound journey with stock-specific action. Global macro data which will be released during the week will continue to provide cues to domestic equities.”

Notably, key equity benchmarks have been on a rally in the past week. The BSE Sensex soared 1,279.5 points or 1.57 per cent in the week, while the NSE Nifty gained 412.75 points or 1.66 per cent.

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Explaining the rally seen in the markets last week, Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, noted that benchmark indices are climbing on hopes of a rate cut by the US Fed in its next meeting in September. However, investors could adopt a cautious stance and return to profit-taking in light of the recent upwards trajectory seen in the stock market.