Market outlook: Fed rate decision, trade talks, FII flows likely to drive Sensex, Nifty next week
The coming week is expected to be crucial for Indian stock markets as investors look ahead to key global and domestic developments.
The US Federal Reserve’s policy meeting, progress on India’s trade deals with the US and the EU, and the trend of foreign institutional investors (FIIs) will likely set the tone for market movements.
Market experts believe that the US Fed may cut interest rates by 25 basis points in its upcoming meeting.
A deeper cut of 50 basis points, however, would be a surprise and could boost sentiment in global markets, including India.
Updates on India’s trade negotiations will also be closely tracked. Last week, Commerce and Industry Minister Piyush Goyal said that discussions on an India-US trade deal are ongoing and that the first phase could be finalised by November.
He also noted that talks on the India-EU trade deal are at an advanced stage. FII activity will be another key driver for the markets.
Out of the last five trading sessions, FIIs were net buyers in two, with inflows worth Rs 129.58 crore on Friday alone. This indicates that the FII trend is slowly turning positive.
The previous week was strong for Indian equities. The Nifty gained 373 points, or 1.51 per cent, to close at 25,114, while the Sensex climbed 1,193.94 points, or 1.48 per cent, to end at 81,904.70.
Looking ahead, experts maintain a positive stance on equities. They suggest focusing on domestic cyclicals such as autos, metals, and consumer discretionary, while keeping a balance with defensives like select FMCG and pharma stocks.
On the technical front, analysts at Religare Broking said the Nifty has tested its previous swing high near 25,150.
“While some consolidation cannot be ruled out, the outlook remains positive with the next upside target seen in the 25,250–25,500 range,” Ajit Mishra said.
“On the downside, immediate support lies at 24,800, with the 100-DEMA around 24,650 acting as a stronger cushion,” Mishra added.
For Bank Nifty, the index is hovering near resistance at 55,000, where the 100-DEMA aligns with price hurdles.
“A breakout above this level could trigger short covering and open the way for 56,200, while support exists in the 54,000–54,400 zone and major support at the 200-DEMA near 53,600,” Mishra mentioned.
