In the forthcoming week, global financial markets will be closely monitoring a series of crucial events and indicators that have the potential to significantly influence market sentiment and direction. As the Nifty, a prominent benchmark index, nears record highs, investors and analysts are focusing on several factors poised to shape market dynamics.
One of the most anticipated events is the US Federal Reserve’s policy meeting outcome. Scheduled for Tuesday, this meeting will culminate in an interest rate decision expected on Wednesday, September 20. The consensus among market observers and analysts suggests that the Federal Reserve is likely to maintain its current benchmark overnight interest rate. Additionally, economic data from China, including the loan prime rate announcement for 1-year and 5-year loans on September 20, will be scrutinized for insights into the world’s second-largest economy.
Further influencing market sentiment will be updates on the Japan inflation rate, set to be revealed on September 22. These global macroeconomic indicators, coupled with US data such as S&P global manufacturing and services PMI, crude oil inventories, initial jobless claims, UK inflation, and Eurozone inflation, are expected to be closely watched.
Foreign institutional investors (FIIs) have garnered attention by increasing their investments in Indian equities. This comes after domestic benchmarks, Sensex and Nifty, reached record highs. According to data from the National Stock Exchange (NSE), FIIs have collectively bought ₹33,124.28 crore of Indian equities, resulting in an inflow of ₹164.42 crore. Additionally, domestic institutional investors (DIIs) have infused ₹1,938.57 crore into Indian stocks. While the market’s underlying sentiment remains bullish, high valuations and new risks, such as surging crude oil prices and a rising US dollar index, pose potential challenges.
Crude oil prices have reached a 10-month high, driven by Saudi Arabian production cuts and optimistic expectations regarding Chinese demand. Brent crude futures closed at $93.93 a barrel, while US West Texas Intermediate futures settled at $90.77 a barrel, both trading at 10-month highs. The sustained increase in oil prices can impact India’s current account deficit, currency exchange rates, inflation, fiscal deficit, and overall domestic growth. India, being a net importer of crude oil, is particularly vulnerable to fluctuations in oil prices.
Several companies, including Steel Authority of India (SAIL), Mazagon Dock Shipbuilders, and Rail Vikas Nigam Limited (RVNL), will trade ex-dividend in the coming week. Furthermore, ten new initial public offerings (IPOs) are set to launch across various segments of the market, presenting opportunities for investors.
From a technical perspective, the Nifty is approaching its immediate resistance level of 20,300. A decisive break above this level could pave the way for further gains, potentially towards 20,700. Market experts advise a “buy on dips” approach, particularly in large-cap stocks, while maintaining selectivity in midcap and small-cap investments.
Bank Nifty, another key index, closed with a gain of over 2%, hovering near its all-time high of 46,369. A breakthrough above this level could trigger a short-covering rally towards the 46,600–47,000 zone.
Despite the positive momentum, some market participants remain cautious, considering high valuations and external factors such as crude oil prices and the US dollar index.
As markets prepare for a week filled with important events and data releases, investors are advised to exercise prudence and seek guidance from certified experts before making investment decisions.
