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Events to watch out for: Analysts anticipate that the stock markets will be influenced by the US Fed interest rate decision scheduled for the upcoming week, alongside monitoring global market trends and foreign investors’ trading activities. Last week witnessed a strong downturn in smallcap and midcap firms, coupled with foreign fund outflows and elevated crude oil prices globally, which dampened investor sentiment.
The near-term outlook for equity markets is expected to remain volatile, particularly with several global central banks set to announce monetary policy decisions throughout the week. Pravesh Gour, Senior Technical Analyst at Swastika Investment Ltd., highlighted the role of the US Federal Reserve’s two-day policy meeting commencing on March 19, with the interest rate decision slated for March 20, 2024. Additionally, attention will be on China’s announcement of the loan prime rate and the Bank of Japan’s interest rate decision on March 19, with Japan’s inflation rate announcement scheduled for March 22.
Factors such as the movement of the rupee against the dollar, US bond yields, and crude oil prices will also be closely monitored. Last week, both the BSE benchmark and the NSE Nifty experienced notable declines, with the BSE smallcap and midcap indices witnessing substantial drops.
Given the prevailing uncertainty, local investors will closely observe global market movements to make informed decisions regarding their equity exposure. Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd., expects market volatility to persist in the near term, focusing on large caps and defensive names amid mixed macroeconomic data affecting rate cut expectations.
Furthermore, investors’ attention will shift to the upcoming Lok Sabha polls, scheduled in seven phases starting April 19, with vote counting on June 4. Vinod Nair, Head of Research at Geojit Financial Services, emphasised the significance of global central banks’ monetary policy decisions alongside the forthcoming elections.
(With PTI inputs)
