Global trends to dictate movement in markets this week, say analysts

Stock markets will be largely driven by global trends in the absence of any major domestic triggers this week, say analysts.

The trading activity of foreign investors, global crude oil prices and rupee-dollar movement will also influence market movement, they said.

"Anticipating a period of consolidation in the absence of clear global cues, the market's trajectory will likely hinge on the movement of the US bond yields, the dollar index, and crude oil prices, as well as institutional flows.

"The market's stability may be influenced until the conclusion of state elections, at which point a discernible trend might materialize," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Foreign portfolio investors have largely been sellers in Indian markets since August. During August, September October and November till 15th FPIs cumulatively sold stocks for Rs 83,422 crores through the exchanges, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

During this period DIIs alone bought stocks worth Rs 77,995 crores.

FPI selling is completely neutralised by DII and individual investor buying. This is the reason why Nifty is around 19700, the same level which it was in early August, he added.

"The market will focus on global and domestic macroeconomic data, US bond yields, crude oil inventories, FII (Foreign Institutional Investors), DII (Domestic Institutional Investors) investment trend, movement of the rupee against the dollar," Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd, said.

Markets will take further cues from US existing home sales, initial jobless claims, US manufacturing and services PMI, FOMC (Federal Open Market Committee) meeting minutes, UK manufacturing and services PMI, Nanda added.

Softer-than-expected US inflation data and easing bond yields have bought optimism in equities.

Last week, the BSE benchmark jumped 890.05 points or 1.37 per cent, while the Nifty climbed 306.45 points or 1.57 per cent.

Ajit Mishra, SVP - Technical Research, Religare Broking Ltd, said, "Global cues are largely dictating the trend and we expect this trend to continue in the coming week as well."

All key sectors, barring banking, participated in the move and posted strong gains wherein IT, realty and auto were the top gainers.

The broader indices maintained their buoyancy and the midcap index also reclaimed its record high after two months.