The domestic markets are likely to open on a weak note, amid global pressure. Gift Nifty at 24,800, signals a gap down of 100 points for Nifty. According to analysts, the stock markets have already discounted a 25 bps cut in interest rate by the US Federal Reserve in the upcoming meet. However, if the cut is any bigger, the market would see an instant bounce back, they added.

According to experts, currently, there is no domestic trigger for the market, though there are concerns over valuation; our markets are likely to remain in consolidation phase.

Meanwhile, Japan’s Nikkei and Taiwan’s main index have tumbled over 2 per cent in early deals on Monday. Other stocks in the Asia-Pacific are also down between 0.3 and 1.5 per cent

Palka Arora Chopra, Director of Master Capital Services, said: Nifty50 and Sensex ended their three-week rally, driven by weak US economic data that reignited concerns about a potential recession in the world’s largest economy. “Additionally, the manufacturing PMI remained in contraction for the fifth consecutive month. These underwhelming economic indicators are heightening recession fears, while increasing the likelihood of US rate cuts by around 50 bps,” she said.

According to Pravesh Gour, Senior Technical Analyst at Swastika Investmart, Globally, the upcoming FOMC meeting, scheduled for mid-September, is drawing significant attention, with widespread expectations that the Federal Reserve will cut interest rates. “The magnitude of this reduction will largely depend on the latest employment data. If the US jobs report falls short of expectations and unemployment rises, it could prompt the Fed to implement a more substantial rate cut of 50 basis points,” he said.

According to analysts, market participants will track foreign portfolio investors’ behaviour. 

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said: Early September witnessed buying by FPIs, due mainly to the resilience of the Indian market. For September through 6th, FPIs invested ₹9,642 crore in equity through the exchanges and ₹1,388 crores through the ‘primary market and others’ category.

“The latest jobs data in the US indicates a slowing US economy which, in turn, has pushed up expectations of a rate cut by the Fed in September, perhaps by 50 bps even. The consequent fall in the US 10-year bond yield to 3.73% is positive for FPI inflows into emerging markets like India. However, the elevated valuations are a concern. If US growth concerns impact global equity markets in the coming days, FPIs are likely to use the opportunity to buy in India,” he added.

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