Stock markets will focus this week on trends in long-term bond yields, crude oil prices and macroeconomic data, as investors look for clues amid the volatility, analysts said.
In addition, investments by REITs (Foreign Portfolio Investors) as well as domestic investors, movements of the rupee against the US dollar and developments on the coronavirus front should be watched closely for clues.
“US 10-year G-Sec yields exceeded 1.5% at the close, which is somewhat negative for global equities. The dollar index also fell from 90 to 92, which is considered negative for emerging market currencies and also stocks.
“In the absence of any major domestic triggers, Indian markets could draw inspiration from global developments and US markets,” said Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities.
The tone of the market appears to be declining, for now, Oza added.
On March 5, the benchmark BSE Sensex fell more than 440 points and the NSE Nifty fell below the psychological level of 15,000 amid a relentless sell-off in global stocks as turmoil in the US bond market continued. to shake up investors.
“Over the coming week, the market will focus primarily on expectations as to whether the Fed, at its next meeting, will maintain its accommodative stance in a rising bond yield market. In addition, the Fed’s measures to keep interest rates low and liquidity high will also provide relief to market sentiment, ”said Vinod Nair, head of research at Geojit Financial Services.
On a weekly basis, the Sensex gained 1,305.33 points or 2.65 percent. Analysts believe, however, that the market as a whole should consolidate or correct itself further in a bearish market climate.
“On a weekly basis, despite the market closing in positive territory, the market mood was sluggish. A substantial jump in long-term Treasuries yields and upward activity in the dollar index towards 92, have resulted in weakness around the world, ”said Shrikant Chouhan. , Executive Vice President, Technical Equity Research at Kotak Securities.
Additionally, Chouhan noted that “in the coming week we may see Nifty / Sensex hitting at least 14,750 / 50,000 or 14,550 / 49,300 levels.” On the upper side, 15 150/51 200 and 15 280/51 600 would be major obstacles. The focus should be on FMCG and automotive companies.
In addition, investors will also follow national macroeconomic triggers – IPC, WPI and IIP – for other indices.
Investors will also follow Brent price movements, with rising oil prices being another risk for Indian markets. Futures contracts on Brent, the world’s benchmark for oil, are currently hovering around $ 69 a barrel.
Meanwhile, foreign institutional investors were net sellers in the capital market as they unloaded shares worth Rs 2,014.16 crore on Friday, according to exchange data.
According to Deepak Jasani, Head of Retail Research at HDFC Securities, “Indian equity investors will look at the trend of overseas bond yields to take on higher risk and in the meantime the markets may consolidate / correct”.