Analysts see volatility in Indian market to continue, say global trends, foreign fund movement, oil prices to guide markets next week

In the absence of any major domestic event scheduled coming week, the Indian equity markets focus is expected to shift to global trends, while keeping a tab on foreign fund movement and crude oil prices, analysts said, adding that the progress of monsoon would also be monitored.

"In absence of any major domestic event, global cues will continue to dictate the trend. Participants will also be eyeing COVID cases trend and progress of monsoon," Ajit Mishra, VP - Research, Religare Broking Ltd, said.

“Relentless selling by FIIs is a key concern for the Indian markets. Rupee movement and development of monsoon will be other important factors for the market," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Weak global cues, a sharp rate hike in the USA and aggressive selling by FIIs (Foreign Institutional Investors) were the key reasons for last week's turmoil, Meena added.

"There are many moving parts which are likely to determine the course of movement for equity markets. In the near-term, some of the key factors that are to be important to track include inflation and monetary policy, trajectory of commodity price movement especially oil, any development on the Ukraine-Russia war and outlook on domestic demand and corporate earnings," said Shibani Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company.

Yesha Shah, Head of Equity Research, Samco Securities, said, "As there are no other major domestic or international macro events this week, Indian indices are expected to be jittery, moving in-tandem with the global peers."

She suggested Investors should therefore remain cautious and begin making small, selective investments in fundamentally superior companies that are available at reasonable valuations.

“The aggressive stance of Fed has triggered the fear of recession, which is cascading to markets across the globe. However, easing of global energy supply could change the dynamics ahead.” Mishra said advising participants should follow the trend, which is indicating more pain ahead.

“After the decisive breakdown of major support around 15,650, Nifty is now inching towards the 14,800-15,000 zone. In case of any rebound, the index would face stiff resistance around 15,550-15,700 levels,” the VP - Research, Religare Broking Ltd, also said.

He recommended that Investors can selectively look for buying opportunities as several quality stocks are now available at a good bargain.

Markets plunged sharply lower and lost over 5.5%, pressurised by weak global cues. Finally, benchmark indices, Sensex and Nifty, settled around the week’s low to close at 51,360.4 and 15,293.5 respectively.

All sectors traded in tandem with the trend and ended with sharp cuts wherein metal, IT and energy pack were the top losers. The broader indices underperformed the index and lost in the range of 6-8%.

With PTI Inputs