Market sentiment is anticipated to remain cautious next week, with ongoing FII selling, weak earnings, and key corporate results in focus. Experts suggest the October derivatives expiry and US economic data may also add volatility.
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- FIIs continue to sell, impacting market sentiment
- Key earnings and October derivatives expiry expected to add volatility
- Market experts monitor economic data for future trends
After four straight weeks of losses, the Indian stock market continues to feel the impact of foreign institutional investor (FII) selling and weak corporate earnings, factors experts say will likely shape market sentiment in the coming week.
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According to market watchers, several key events will unfold that could add volatility. Quarterly results from companies such as Bharti Airtel, Cipla, Dabur, and Larsen & Toubro (L&T) are anticipated, and investors are keen to see if these results can offer any boost to market confidence. Furthermore, the upcoming October derivatives expiry and the release of new auto sales data as November begins could provide additional direction.
Ajit Mishra, SVP of Research at Religare Broking Ltd., highlighted the influence of global markets, especially the United States, on Indian stocks. "Despite limited direct alignment, US market trends remain relevant, particularly with rate-cut speculation and the approaching presidential election," he said, noting that the Dow Jones Industrial Average fell by over 2.5% last week while the S&P 500 and Nasdaq Composite remained relatively flat or slightly lower.
The Indian market experienced a persistently negative tone last week, with benchmark indices Nifty and Sensex ending near weekly lows at 24,180.80 and 79,402.29, respectively. The downturn was largely attributed to ongoing foreign fund outflows and less-than-expected earnings results, according to analysts.
S&P Global Market Intelligence has forecasted that the coming week will be packed with economic data from the US and the eurozone, creating added complexity as markets juggle ongoing earnings reports and the evolving US election outlook, as per ANI.
Vinod Nair, Head of Research at Geojit Financial Services, expressed cautious optimism, suggesting the market might be approaching an oversold territory due to extended selling pressure. "We can expect a tactical bounce in the short term. The resilience seen in recent manufacturing data hints at a potential economic recovery in the second half of FY25, which may encourage investors to accumulate quality stocks," he commented.
Sector-wise, real estate, metals, and auto stocks saw significant declines over the last week, while IT managed to hold steady. Experts noted that the quarterly results revealed sluggish demand and margin pressures, which particularly affected FMCG, metals, auto, and real estate sectors. The IT sector, in contrast, remained relatively stable, supported by expectations of increased BFSI (Banking, Financial Services, and Insurance) spending and a positive US outlook.
According to Nair, consolidation is expected to continue in the near term, with any trend reversal depending on a reduction in FII selling pressure and the outcome of the US presidential election.
In the coming week, as investors assess earnings, derivative expiries, and macroeconomic data, the market will likely remain sensitive to both global cues and domestic factors, which could dictate the course of investor sentiment.
(With inputs from ANI)
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