Indian stock markets reached new highs this week, fueled by global optimism about potential rate cuts. Market watchers noted the positive impact of these expectations on global markets.
The European Central Bank (ECB) recently reduced its deposit rate by 25 basis points to 3.50% to stimulate sluggish growth. This move has contributed to a buoyant global market atmosphere.
In the United States, all eyes are on the Federal Open Market Committee (FOMC) meeting, set to announce its interest rate decision on September 18. Analysts believe this announcement will be pivotal for market direction. Additionally, domestic corporate earnings are expected to improve in Q2 FY25, influencing the Indian market.
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This week, Indian indices rebounded from previous negativity caused by SEBI’s deadline on FIIs disclosure norms and recession concerns in the US. Despite some volatility, both domestic institutional investors (DIIs) and foreign institutional investors (FIIs) showed positive flows. Factors such as a strong monsoon and anticipated festive season demand bolstered investor sentiment.
On Thursday, equity indices closed higher, with Sensex and Nifty reaching new all-time highs of 83,116 and 25,433, respectively. Most indices ended the day in the green, with major gains in the auto, IT, PSU, financial services, pharma, metal, and energy sectors.
Looking ahead, Crisil Market Intelligence and Analytics predicts that domestic G-sec bond yields will be influenced by FPI flows, crude oil prices, global interest rates, CPI inflation, and policy decisions from the RBI’s MPC and the FOMC. Rupak De, Senior Technical Analyst at LKP Securities, noted that Nifty’s strong performance above the 21-day EMA suggests a continued bullish trend.
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