FII trading activity, global trends to dictate equity markets: Analysts

Trading activity of foreign investors and global trends will be the major driving factors for the equity markets in a holiday-shortened week ahead, according to analysts.

Leading stock exchanges BSE and NSE have declared a trading holiday on November 20 for assembly elections in Maharashtra.

Elections to the 288-member state legislative assembly will be held on November 20, and votes will be counted on November 23.

"The Indian stock market will remain shut on Wednesday, November 20, in observance of Maharashtra assembly elections. The election results, along with key global economic indicators, including US bond yields, dollar index performance, US unemployment claims, flash manufacturing and services PMI data, and Japan's inflation data, will be pivotal in shaping market direction.

"High US bond yields and a strengthening dollar post-election have impacted emerging markets like India, and FII (Foreign Institutional Investors) activity remains a key factor, influencing Indian equities in the near term," Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said.

The movement of global oil benchmark Brent crude and rupee-dollar trend would also influence trading in the market, experts said.

"This week is also shortened due to a holiday, and with the earnings season largely concluded, attention will shift back to FII flows. Foreign institutional investors have been on a consistent selling spree for the past month and a half. Additionally, traders will keep a close watch on global market trends," Ajit Mishra SVP, Research, Religare Broking Ltd, said.

Last week, the BSE benchmark gauge Sensex fell 1,906.01 points or 2.39 per cent.

Equity markets were closed on Friday for Guru Nanak Jayanti.

The BSE benchmark fell a massive 8,397.94 points or 9.76 per cent from its all-time high, and the Nifty has also lost 2,744.65 points or 10.44 per cent from the record peak.

Sensex hit its record peak of 85,978.25 on September 27 this year, and the NSE Nifty also reached a record 26,277.35 on the same day.

The sharp fall in the benchmark indices was triggered by foreign investors fleeing the domestic market, weak Q2 earnings and high valuations of equities.

Markets remain volatile on the back of subdued Q2 results, rising dollar index and continuous FII selling over the past month and a half, Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.