Global cues to drive investors’ sentiments (Market Outlook)

Mumbai, Nov 6 (IANS) Global cues such as the US presidential election, trends in dollar strength and crude oil prices are expected to drive investors’ sentiments during the upcoming week.A

Besides, the direction of foreign fund flows, along with the ongoing quarterly results will be other major themes to look out for during the week starting November 7, market analysts said.

“The focus in the next week will be completely on the outcome of the US elections” Devendra Nevgi, Chief Executive of zyfin Advisors, told IANS.

“The uncertainty would keep the markets on edge till the outcome and safe haven assets would continue to outperform.”

The US presidential will be held on November 8.

Other important global cues such as non-farm payrolls data and crude oil price movement are also expected to be keenly followed by investors.

“The market may remain volatile with global concerns overhang. Support is seen near 8,400 levels. Besides, market sentiment will be dictated by investment trend of overseas and domestic investors, movement of the rupee and crude oil prices,” pointed out D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors.

The reaction to the decline in US macro-statistics on non-farm payrolls data, especially given the impending rate hike scenario in December will be another major theme for the coming week.

The US Bureau of Labor Statistics last Friday reported that the total non-farm payroll employment increased by 161,000 last month, whereas the unemployment rate was little changed at 4.9 per cent.

The lower-than-expected data assumes significance as it can hamper the start of the next rate-hike cycle expected in December.

A hike in the US interest rates can potentially lead fpis (Foreign Portfolio Investors) away from emerging markets such as India.

“The lower than expected US non farm payroll figures could dilute FOMC (Federal Open Market Committee) rate hike expectations for December,” Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, told IANS.

On the domestic front, the ongoing second quarter earning results will be watched for sector specific developments.

Major firms like BHEL, Britannia Industries, State Bank of India (SBI), Bharat Forge and ICICI Bank are expected to come out with their Q2 results during the upcoming week.

“Indian banks have shown no respite from npas, investors will keenly await SBI and ICICI numbers next week, for signs of recovery,” James said.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the domestic investors will closely track FII (foreign institutional investors) fund movement in the Indian equities markets.

Provisional figures from the stock exchanges showed that the week witnessed an outflow of Rs 1,841.40 crore in foreign funds during the week ended Friday, November 4.

Figures from the National Securities Depository (NSDL) disclosed that fpis were net sellers of equities worth Rs 1,504.42 crore, or $225.07 million from November 1-4.

The FPI flows have been in the negative zone since October 21.

Desai added: “Indian equity markets are likely to be volatile due to short covering at lower levels in coming sessions. However, oil-gas stocks are likely to witness strong buying support next week on the back of healthy fundamentals.”

For the week ended November 4, negative global sentiments had dragged the key domestic indices lower — by more than two per cent each.

On a weekly basis, the barometer 30-scrip sensitive index (Sensex) of the BSE had receded by 667.36 points or 2.39 per cent to 27,274.15 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) had edged lower by 204.25 points or 2.36 per cent to 8,433.75 points.

(Rohit Vaid can be contacted at rohit.v@ians.in)

–IANS

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