As the Indian benchmarks experienced range-bound consolidation in the last trading week, markets are expected to remain sensitive to foreign fund outflows and a subdued earnings season, say the market experts.
The investors will be looking at the US markets amid the tightly contested fight between the presidential candidates, Kamala Harris and Donald Trump, in the upcoming US elections, scheduled for November and the Federal Reserve's policy meeting on November 8.
"On the domestic front, earnings reports from key companies, including Dr Reddy's, Titan, Tata Steel, M&M, Tata Motors, and Asian Paints, will be in focus. Additionally, the release of key economic indicators, such as the HSBC Manufacturing PMI, Composite PMI, and Services PMI, will provide insight into the country's economic momentum," said Ajit Mishra, SVP, Research, Religare Broking Ltd.
Observing the market conditions, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said that investors are happy as the Nifty at the National Stock Exchange (NSE), which accumulated a return of 25 per cent over the last one Samvat year and the Nifty 500 accumulated 30 percent, but a 6.2 percent correction in October has triggered anxiety over the market performance.
"Given India's elevated valuations and concerns over deceleration in earnings growth, FII selling might continue, impacting the benchmark indices. In such a scenario, investors should focus on stock-specific investment where Q2 results have been good and earnings visibility is bright," he added.
Foreign portfolio investors (FPIs) have again turned net sellers in Indian stock markets in October, after having remained net buyers in the past four months on a trot. Important to mention is that the total stocks they sold in India in October were the highest-ever in a month's time, data showed.
They offloaded stocks worth Rs 94,017 crore in October, data made available by National Securities Depository showed. In June, July, August and September, they bought stocks worth Rs 26,565 crore, Rs 32,365 crore, Rs 7,320 crore, and Rs 57,724 crore, respectively.
FPIs had fuelled the bull run in the stock market, barring the latest slump. As per definition, Foreign Portfolio Investment (FPI) involves an investor buying foreign financial assets.
Markets experienced range-bound consolidation last week, showing significant volatility but ultimately ending slightly higher, marking a pause in the four-week losing streak.
The benchmark indices began the week on a positive note and tried to build on those gains, but global weakness and disappointing earnings capped the upside.
The Diwali special one-hour trading session on Friday provided a boost, helping both the Nifty and Sensex finish in the green, closing at 24,304.30 and 79,724.12, respectively.
Despite the choppy conditions, certain sectors, particularly metals, real estate, and banking, displayed strength, while IT underperformed with a nearly 4 per cent drop after weeks of robust performance.
Broader indices, however, outpaced the benchmarks, with the small-cap index gaining over 5 per cent, providing some relief to market participants.
As the earning season continues, investors will be looking at the second quarterly financials of companies. According to the publicly available data, the financial results of IRFC, GAIL, Tata Steel, Trent and Asian Paints, among others, are scheduled in the upcoming week. (ANI)
