Indian markets to remain cautious next week amid global, domestic uncertainty: Experts

Mumbai (Maharashtra) [India], January 19 (ANI): The participants in the Indian domestic market are expected to maintain cautious tone next week due to the global and domestic clues that include third quarter (Q3) results, foreign fund outflows, US policies in the administration of Donald Trump, among others.

According to the market analysts, the investors in the Indian domestic equity markets will keenly have their eyes on the US bond yields, US Dollar Index and crude oil prices, as well as the earnings of the companies.

“Looking ahead, we anticipate the market to maintain a cautious tone next week due to several domestic and global factors, said Ajit Mishra, SVP, Research, Religare Broking Ltd, observing the markets.

Market experts are of the view that global markets, especially the policies under the new presidency, will greatly influence the sentiments of the investors.

“A combination of factors, including US bond yields, the US Dollar Index and crude oil prices, are likely to prove crucial for the upcoming week. Also, market participants would closely watch trade policies after Donald Trump comes into power on 20 January, as it may be inflationary and lead to further exodus of money from emerging economies like India,” said Manish Chowdhury, Head of Research, StoxBox.

Anticipating the possible impact in the upcoming week, Manish Goel, Founder and Managing Director, Equentis Wealth Advisory Services, stated that key sectors such as IT and pharmaceuticals may face uncertainties due to anticipated U.S. policy shifts, while defence and energy could benefit from stronger bilateral ties.

He said, “Trump’s focus on traditional energy sources and preference for fossil fuels may slow global green energy progress and will also affect India’s renewable sector. Foreign investor sentiment will be crucial in shaping market trends.”

Experts highlighted the positive impact of Maha Kumbh Mela, a major global spiritual event that is boosting India’s tech and tourism industries.

Digital platforms and travel businesses are seeing significant growth in app downloads and bookings, showing the potential for market expansion, experts say.

Similarly, negotiations and developments during the World Economic Forum (WEF) Annual Meeting in Davos taking place from January 20-24 will also be watched by the market participants, according to the market experts.

The markets, in the last trading sessions, continued their consolidation phase, shedding nearly a percent as the corrective trend persisted.

Persistent selling by FIIs, mixed corporate earnings, and a sharp rise in crude oil prices dampened investor sentiment in the previous sessions.

On the brighter side, easing retail inflation and strength in select heavyweight stocks helped limit the pace of the decline.

Ultimately, the benchmark indices, Nifty and Sensex, closed at 23,203.2 and 76,619.33, respectively. Sectorally, there was a mixed trend, with metals and energy showing decent gains, while IT stocks plunged sharply due to weak earnings, followed by declines in the realty and FMCG sectors.

Interestingly, broader indices displayed resilience amidst the volatility, ending almost flat. iiiiiiiik