Analysts predict that this week’s equity market dynamics will be largely shaped by global trends, tariff updates, and the trading behavior of foreign investors. Following last week’s impressive performance, where benchmark indices climbed over 4%, the momentum appears set to continue. This surge was driven by a renewed sense of investor confidence, a rise in foreign capital inflows, and favorable international developments.
Factors Influencing Market Movement
As investors brace for the week ahead, several key indicators will be under scrutiny:
- Rupee-Dollar Exchange Rate: Fluctuations in this rate could impact trading strategies.
- Brent Crude Prices: The direction of global oil prices will also play a significant role.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, notes, “The return of foreign institutional investors to the Indian market, coupled with attractive valuations and signs of economic recovery, should maintain this upward trajectory.”
Focus on Derivatives and Global Markets
With no major domestic economic events on the calendar, traders will likely concentrate on the expiration of March derivatives contracts and foreign institutional investor (FII) activity. Additionally, developments in the U.S. markets are expected to influence sentiment, especially with upcoming tariff updates and GDP growth figures on the horizon.
Ajit Mishra, SVP of Research at Religare Broking, commented, “While U.S. markets recently enjoyed a brief recovery after a sharp drop, the mixed signals suggest potential volatility in the days ahead.”
Last Week’s Market Performance
Last week, the BSE benchmark witnessed an impressive rally, gaining 3,076.6 points or 4.16%. The Nifty index also enjoyed a robust increase, rising by 953.2 points or 4.25%. This consistent recovery has created optimism among investors.
Vinod Nair, Head of Research at Geojit Financial Services, shared insights on the market’s rebound: “The reduction in risk-free rates and the dollar index correction are encouraging capital inflows to emerging markets. Notably, foreign institutional investors, who had been on a selling spree, are shifting to net buyers, buoyed by dovish signals from the U.S. Federal Reserve. This suggests possible rate cuts in the coming months, which has rekindled optimism in the domestic market.”
Recent FII Activity
According to exchange data, foreign institutional investors purchased equities worth Rs 3,239.14 crore on Thursday, followed by further acquisitions totaling Rs 7,470.36 crore on Friday. This strong buying trend underscores the growing confidence in the Indian equity market.
As investors navigate these developments, staying informed about global and domestic indicators will be essential for making strategic investment decisions.
