Domestic markets are expected to open flat on Monday amid mixed global cues. Gift Nifty 26,310 signals a flat to negative opening for Nifty, as analysts see some moderation in the bull run.
Geopolitical tension in West Asia will keep global market nervous said analysts. Japan’s Nikkei slumped over 4 per cent (amid rate hike worries). Korean and Taiwan markets are down about a per cent. Meanwhile, Shares in Hong Kong and mainland China soared soon after Beijing’s slew of measures to boost the country’s flagging economy, particularly the property sector. The Hang Seng Index over 1 per cent and the Shanghai Composite Index jumped over 3 per cent.
Last week, the BSE Sensex jumped 1.21 per cent and the Nifty 1.50 per cent. The Sensex hit a new peak at 85,978.2 and the NSE Nifty at 26,277.35, amid heavy buying by foreign portfolio investors.
Analysts said global sentiment, heightened tension involving Israel, Lebanon, and Iran, FPI flows, and domestic macroeconomic data announcements would direct the equity market in a holiday-shortened week. Equity markets will remain closed on Wednesday for Mahatma Gandhi Jayanti, keeping market participation low this week.
Vishnu Kant Upadhyay, AVP of Research and Advisory at Master Capital Services, said: The outlook for the market will be guided by the major domestic and global economic data such as RBI Monetary and Credit Information Review India, India Nikkei S&P Global Manufacturing PMI (Sep), India Nikkei Services PMI (Sep), India Infrastructure Output (YoY), US Fed Chair Powell Speaks, US Manufacturing PMI (Sep), US Services PMI (Sep), US Initial Jobless Claims, US Unemployment Rate (Sep), US Nonfarm Payrolls (Sep), China Manufacturing PMI (Sep).
Krishna Appala, Sr. Research Analyst, Capitalmind Research said: The return of foreign portfolio investors will bolster the sentiment further said, market experts.
Foreign Institutional Investors (FIIs) are making a strong comeback, pumping nearly ₹50,000 crore into the Indian markets in September alone. This marks the second-largest monthly inflow in the last three years, trailing only December 2023. “FPIs have also shown a growing interest in Indian debt, with ₹18,000 crore flowing driven by the inclusion of Indian bonds in JP Morgan’s index. With large-cap valuations remaining attractive and FIIs returning in force, the outlook for the market remains positive,” he added.
According to him, “We are now witnessing a phase of sector rotation. Large-cap stocks are receiving more inflows compared to mid and small-caps, which had been market favourites until recently. Sectors like Public Sector Banks, Defence, and Railways, which saw heavy participation earlier, are gradually being overshadowed by underperformers such as Pharma, Private Banks, and mid-size IT. These sectors, with their attractive valuations, are likely to lead the next market phase for the coming quarters.”