Indian Stock Market: 8 Key Factors to Watch This Week
The domestic equity market benchmark indices, Sensex and Nifty 50, are expected to open higher on Monday, following upbeat global market cues on rising hopes of an interest rate cut by the US Federal Reserve.
Global Market Cues
Asian markets traded higher, while the US stock market rallied last week, with the Dow Jones hitting a record closing high, after US Federal Reserve Chair Jerome Powell’s Jackson Hole speech. Traders boosted bets on a September rate cut after Powell’s comments, now placing a nearly 90% chance of a reduction, versus about 75% before Powell’s remarks.
Indian Stock Market Performance
On Friday, the Indian stock market ended sharply lower, with the benchmark indices snapping their six-day winning streak. The Sensex declined 693.86 points, or 0.85%, to close at 81,306.85, while the Nifty 50 settled 213.65 points, or 0.85%, lower at 24,870.10.
Key Stock Market Triggers
In this holiday-truncated trading week, investors will focus on key stock market triggers, including the monthly F&O expiry, US Tariff deadline, India GDP data, changes in the Nifty 50 index, trends in crude oil prices, and other global and domestic macroeconomic data.
According to Ajit Mishra, SVP, Research, Religare Broking Ltd, Maintaining a measured long bias is prudent, with staggered buying on dips in quality names where earnings visibility remains strong. Investors and traders should manage event risks carefully, trimming leveraged positions ahead of key domestic and global data and redeploying selectively as volatility eases.
Gift Nifty and Global Market Cues
Gift Nifty was trading around 24,966 level, a premium of nearly 68 points from the Nifty futures’ previous close, indicating a positive start for the Indian stock market indices. Asian markets traded higher on Monday, tracking Wall Street gains on expectations of an interest rate cut by the US Federal Reserve next month.
US Stock Market Performance
The US stock market ended higher on Friday after US Fed Chair Jerome Powell hinted at a near-term interest-rate cut during his Jackson Hole Symposium speech. The Dow Jones Industrial Average rallied 846.24 points, or 1.89%, to 45,631.74, while the S&P 500 jumped 96.74 points, or 1.52%, to 6,466.91.
Jerome Powell’s Jackson Hole Speech
US Federal Reserve Chair Jerome Powell, in his Jackson Hole speech, gave feeble hints that policy adjustments
may occur in the coming months but warned that risks of higher inflation remain. Powell hinted at a near-term interest rate cut at the Fed’s September meeting, although Powell stressed the importance of jobs and inflation data due before then.
Russia-Ukraine War and Dollar Index
Russia said Ukraine launched drone attacks that sparked a fire at a nuclear power plant in its western Kursk region overnight. The US dollar attempted to pull itself up from a four-week low on the euro. The US dollar index rose 0.2% against its rivals after dropping to a four-week low.
Gold and Crude Oil Prices
Gold prices fell as the dollar crept higher, while increased US interest rate cut expectations lent support to bullion. Spot gold price declined 0.2% to $3,364.25 per ounce, after hitting its highest since August 11 on Friday. Crude oil prices traded higher after Ukraine stepped up attacks on Russia.
To stay ahead of the market, it’s essential to keep an eye on these key factors and adjust your investment strategy accordingly. Learn more about investing strategies and how to navigate the Indian stock market.
