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The Indian equity market is poised for a week of volatility, with analysts anticipating that global trends, foreign investor activity, and domestic macroeconomic data will significantly influence trading. This comes as the markets are set to close on Wednesday for Mahatma Gandhi Jayanti, leaving a shortened trading week.
Ajit Mishra, from Religare Broking Ltd, highlights the importance of global factors, especially in the absence of major domestic events. Key data releases, including auto sales, manufacturing, and services PMI, will be closely watched alongside trends in foreign fund flows and crude oil prices. These global cues are expected to play a pivotal role in shaping the market's direction.
Domestically, upcoming monthly auto sales data and quarterly company reports are expected to drive stock-specific movements. The manufacturing and services PMI data will also provide valuable insights into the health of the Indian economy, influencing investor sentiment. These domestic factors will add further layers of complexity to the already dynamic market environment.
Siddhartha Khemka, from Motilal Oswal Financial Services Ltd, maintains a positive outlook, expecting continued momentum driven by frontline stocks. The previous week saw the BSE benchmark rise by 1,027.54 points (1.21%), while the Nifty gained 388 points (1.50%), both reaching record intra-day highs. This positive momentum suggests that investor confidence remains relatively strong.
Vinod Nair, from Geojit Financial Services, emphasizes the importance of Q2 earnings, with investors anticipating improved outlooks from companies. The market's positive reaction to the Fed's rate cut and China's economic stimulus has further boosted investor confidence and generated momentum in global markets. This confluence of positive factors has contributed to a more optimistic outlook for the equity markets.
In conclusion, the upcoming holiday-shortened week is expected to be influenced by a combination of global and domestic factors. While global trends and foreign investor activity will play a crucial role, domestic data releases and corporate earnings will also shape the market's direction. As investors navigate this complex landscape, they will need to carefully monitor these key drivers to make informed investment decisions.
Source: Markets to track global cues and foreign investor activity in holiday-shortened week, says analysts