New Delhi : Domestic benchmark indices have remained volatile throughout the past week, with concerns over slowing Quarter 3 earnings weighing heavily on investor sentiment. As the Union Budget approaches, market experts are keen to gauge how the stock market will react, particularly given the anticipated global inflation data and domestic economic indicators. Foreign fund outflows and the policies of the US administration under President Donald Trump will also play a crucial role in shaping market movements in the near term.
From a macroeconomic perspective, inflation data for December will be closely watched, particularly in relation to the upcoming Reserve Bank of India (RBI) policy meeting in February. Additionally, investors will remain focused on global inflation trends, especially the US inflation numbers. Market participants are also keeping an eye on China’s GDP figures for the December quarter, as well as inflation numbers from Europe and the UK, all of which will influence global economic outlooks.
The last week saw both the Sensex and Nifty indices decline by over one percent, with the Nifty IT index standing out for its steepest weekly drop in nearly a year, falling by six percent due to sectoral weakness. This marked the second consecutive week of trading below the 200-day exponential moving average (EMA), signaling continued bearish momentum in the market. Despite the overall decline, certain sectors exhibited resilience, with midcap stocks showing stronger performance and corporate earnings from specific sectors, like Hindalco, NTPC, HDFC Life, and Reliance Industries, offering a positive note in an otherwise weak market.
On the flip side, the IT sector remained under pressure, with stocks like HCLTech, Infosys, Wipro, and Mahindra & Mahindra being the biggest losers of the week. Sectoral performance reflected selective buying interest, even amid the overall bearish market sentiment. While indices for IT and banking lost about two percent each, sectors such as Oil and Gas, Power, FMCG, and Metals gained around one percent, indicating that investors may be positioning defensively in the face of broader market uncertainty.
As the new week begins, market watchers will continue to monitor key support levels and look for global cues to assess the outlook for equities. With the Union Budget and key global inflation data on the horizon, the coming weeks will be pivotal in determining the market’s direction. Investors will need to navigate through the complexities of domestic economic performance, global inflation trends, and geopolitical developments as they position themselves for potential opportunities in a volatile environment.
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