By Vineet Kumar 
Top 5 Factors That Can Sway Sensex, Nifty This Week
The Indian stock markets have been on a steady rise, with Nifty and Sensex extending their positive streak for the fourth consecutive week, registering a modest 0.5% gain amidst consolidation. With a packed week ahead, including crucial events and data releases, traders are treading cautiously. Here’s a detailed look at the key factors likely to influence market movements:
1. US Federal Reserve Meeting
All eyes are on the US Federal Reserve’s policy meeting scheduled for December 18. Markets have already priced in a 25-basis-point rate cut, but the Fed’s commentary on future rate actions will set the tone for global sentiment. The stance of the Federal Reserve holds immense significance for equity markets, as it directly impacts global liquidity and foreign investor behavior.
2. Key Macro Data
Apart from the Fed, monetary policy announcements by the Bank of England (BoE) and the Bank of Japan (BoJ) will keep investors alert. BoE is expected to hold rates steady, while Japan is unlikely to alter its monetary stance.
On the domestic front, traders will keep an eye on PMI data for manufacturing, services, and composite indices, which could provide insights into economic activity and corporate performance.
3. Foreign Institutional Investors (FIIs)
FIIs have infused Rs. 14,435 crore into Indian equities in December so far. While this suggests a temporary pause in FII selling, higher valuations and a rising dollar could prompt profit-booking at elevated levels. Dr. V.K. Vijayakumar of Geojit Financial Services notes that FII behavior remains a critical factor for market sentiment, especially as global markets offer relatively attractive valuations.
4. Global Market Trends
Wall Street wrapped up last week with mixed signals. While the Nasdaq secured its fourth straight week of gains, the S&P 500 and Dow registered slight declines. Any significant movement in US equities this week, especially after the Fed meeting, could trickle down to Indian markets.
5. Technicals and Sectoral Outlook
Nifty’s critical levels this week are as follows:
Upside: A decisive close above 24,800 could drive a recovery toward the 25,200–25,500 zone.
Downside: The 24,300–24,400 range is expected to provide strong support.
Analysts recommend a “buy on dips” strategy with a focus on IT and banking stocks, while other sectors can be approached selectively. According to Ajit Mishra of Religare Broking, stock-specific opportunities should dominate investor strategies as markets navigate this consolidation phase.
Outlook for the Week
The festive season and upcoming year-end holidays are expected to boost consumer spending, further enhancing market sentiment. However, traders should remain vigilant as key events like the Fed’s policy decision and domestic data releases will determine the direction of the market in the short term.
For more insights and updates on Nifty, Sensex, and global market trends, visit TradingThought.