Market Overview
Indian markets were heavily influenced by global events and economic developments last week. The Indian rupee hit a record low of 90.56 against the US dollar, affecting investor sentiment. However, the US Federal Reserve's decision to cut interest rates by 25 basis points and optimism surrounding India-US trade talks helped limit further losses.
Key Highlights
The auto sector saw steady retail activity, with a 2% year-on-year increase in registrations for passenger vehicles, three-wheelers, commercial vehicles, and tractors. Meanwhile, public sector banks wrote off Rs 6.15 lakh crore in loans over the past five years, keeping the financial sector in focus.
Foreign Institutional Investors (FIIs) continued to sell their equity holdings, putting pressure on the market. However, Domestic Institutional Investors (DIIs) provided support by buying, which helped soften the decline. As a result, the Nifty fell by 139 points to 26,046, and the Sensex dropped 445 points to 85,268.
Looking Ahead
Several factors could influence market trends this week:
- Domestic data calendar: The release of India's Wholesale Price Index (WPI) inflation and trade balance figures will be closely watched.
- India-US trade deal: Developments in India-US trade discussions will remain in focus.
- Technical outlook: The Nifty needs to hold above the 25,950 zone to extend its recovery towards the record high of 26,300.
- Currency: The USDINR is under pressure due to continued FPI outflows, but the India-US trade deal could provide some relief to the rupee.
- FII activity: Foreign institutional investors recorded net sales of Rs 396.26 crore in Indian equities, while domestic institutional investors were net buyers at Rs 2,828.21 crore.
Experts advise participants to stay selective and maintain a balanced approach amid ongoing currency volatility and mixed global cues. They also recommend avoiding stocks with negative news flow and waiting for clear signs of stability before taking fresh exposure.