Dalal Street Week Ahead: Key Factors to Watch as Markets Brace for Global and Domestic Events
The week ahead promises a whirlwind of activity for markets, with both domestic and global developments expected to influence sentiment. After a strong rebound last week, fueled by short-covering and optimism around Maharashtra assembly elections, the markets appear poised for another eventful week. Here’s what traders and investors should keep an eye on:
1. Maharashtra and Jharkhand Assembly Elections Results
The market will open on Monday reacting to the outcomes of the assembly elections in Maharashtra and Jharkhand announced last Saturday. BJP-led Mahayuti’s decisive victory in Maharashtra last week provided a significant boost to market confidence. Traders are now watching if this momentum will sustain.
2. GDP Numbers for India and the US
India’s July-September quarter GDP data will be released on November 29. Experts predict growth to be slightly below the 6.7% recorded in the previous quarter, marking a third consecutive decline. Similarly, the US will release its second estimate for Q3 GDP growth. Initial data pegged US growth at 2.8%, slightly lower than Q2’s 3%. Any deviation in these figures could have a ripple effect on global markets.
3. FOMC Minutes and US Economic Indicators
The Federal Reserve’s minutes from the November policy meeting, due on November 27, will provide clues on whether another rate cut is on the cards. Mixed signals from Fed officials and declining probability of a December cut (currently at 52.7%) have added to market uncertainty. Investors will also scrutinize US consumer spending, PCE prices, and durable goods orders for October to gauge economic health.
4. Russia-Ukraine Conflict
Geopolitical tensions remain a critical factor. Russian President Vladimir Putin’s warnings about the Ukraine war escalating globally have heightened concerns. Any new developments could unsettle markets, especially if military escalations affect global energy prices.
5. FII and DII Activity
Foreign Institutional Investors (FIIs) have been net sellers for 38 straight sessions, offloading shares worth ₹11,414 crore last week alone. Despite this, Domestic Institutional Investors (DIIs) have countered the selling pressure, buying ₹11,037 crore worth of shares in the same period. Experts believe FII selling could ease soon as concerns over China and earnings-related risks wane.
6. Earnings and Economic Outlook
While Q2FY25 earnings were subdued, market optimism hinges on a recovery in H2FY25, driven by government spending and a revival in consumer demand. Infrastructure output and fiscal deficit numbers for October, set to be released on November 29, will provide further insights.
7. Market Performance and Volatility
Last week, the BSE Sensex closed 1.98% higher at 79,117, while the Nifty 50 gained 1.6%, ending at 23,907. Midcap and small-cap indices also saw gains of 1.8% and 0.9%, respectively. Analysts expect the market to remain volatile this week, influenced by F&O expiry and global developments.
8. US Dollar and Treasury Yields
The US 10-year treasury yields, consolidating around 4.3%-4.5% levels, and the Dollar Index, which touched a 52-week high last week, will continue to impact global liquidity flows. A weakening dollar or stabilizing yields could attract fresh inflows into emerging markets like India.
9. IPO Market Buzz
The primary market remains active, with six SME IPOs set to launch next week. Rajesh Power Services and Rajputana Biodiesel will kickstart their offerings on November 25 and 26, respectively. This action-packed segment will keep retail and institutional investors busy.
10. Global Economic Data
Japan is set to release a host of October economic data, including unemployment rates, retail sales, and housing starts, on November 29. These indicators will offer insights into the health of Asia’s second-largest economy and could influence regional markets.
Outlook for the Week
Markets are likely to consolidate while retaining a positive bias. However, volatility driven by geopolitical risks, economic data releases, and F&O expiry could test investor nerves. As always, staying nimble and focusing on quality stocks is the best strategy in such dynamic conditions.
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