FII inflows, Fed rate decision to guide stock movement this week: Experts

FII inflows, Fed rate decision to guide stock movement this week: Experts

New Delhi, Mar 17: In the absence of any immediate key domestic triggers, the equity market is expected to be guided by Fed interest rate decision, foreign fund inflows and crude oil prices in this holiday-shortened week, according to analysts.
Stock markets will remain closed on Thursday for Holi.
“Minor profit-booking is expected given sharp run-up in domestic markets and global factors. However, downside will be capped as emerging markets like India is likely to benefit from strong liquidity and reversal in FII flows. For the week ahead, FED interest rate decision is the key event,” said Vinod Nair, Head of Research, Geojit Financial Services.
Besides, movement of foreign funds, rupee and oil would continue to play their part in market trend, the analysts added.
During the past week, the Sensex surged 1,352.89 points or 3.68 per cent to close at 38,024.32 on Friday.
“On the international front one can keep an eye on Fed’s interest rate decision on Wednesday. Overhang on Brexit issue and OPEC’s supply cut are likely to hit the domestic market in specific segment,” said Debabrata Bhattacharjee, Head of Research, CapitalAim.
“During past fortnight, Indian markets have enjoyed one of the best stretches in the recent memory. FII inflows have crossed Rs 30,000 crore in Feb-March’19 till date resulting in a flood of inflows after 2018 drought.
“Most heartening aspect of the current rally is it is quite broad-based across the sectors. As border tensions appearing to have cooled-off, and global central bankers turned pro-liquidity, Indian markets are in risk-on mood,” said Jagannadham Thunuguntla, Senior VP and Head of Research (Wealth), Centrum Broking Limited.
Meanwhile, overseas investors poured in more than Rs 20,400 crore in the domestic capital market in the first half of March, mainly driven by positive global cues.
The expectation of a positive outcome from the US-China trade agreement along with US Fed’s decision to put rate hike on hold, have worked in favour of entire emerging market segment, analysts said.
In February as well, foreign portfolio investors (FPIs) were net buyers as they had invested a net amount of Rs 11,182 crore in the capital markets both in equity as well as debt segment.
As per the latest data available with depositories, net inflow in the equities stood at Rs 17,919 crore, while the debt market saw an infusion of Rs 2,499 crore on a net basis, during March 1-15, period.
Together, it translates into a net investment of Rs 20,418 crore in the country’s capital markets for the period under review.
“With the expectation on US interest rate hike declining, there has been increased flow into emerging markets. Locally, since February, there is a clear trend of FPIs buying beaten down segments such as banking and finance stocks…,” Vidya Bala, Head – Mutual Funds Research at FundsIndia said.
Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India, said it was a welcome change in FPI trend.
However, some of the domestic concerns such as slow pace of economic growth and political uncertainty may come to the fore as the general election approaches in India, he added.