Shillong, October 13: V. K. Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, has suggested that the market is likely to face pressure due to the struggling performance of IT majors, marked by weak revenue guidance for FY24 and a lack of clarity on growth recovery.
As per IANS, he notes that leading banking names have the strength to continue supporting the market.
Vijayakumar pointed out two major macro trends that could impact the market. Globally, the trend is somewhat negative, particularly with the US retail inflation for September registering at 3.7 percent, slightly higher than expected.
This higher inflation could prolong the effort to bring US inflation to the long-term target of 2 percent, resulting in higher interest rates. Such a scenario may restrain a rally in equity markets.
On the domestic front, the macroeconomic indicators have turned notably positive. The Consumer Price Index (CPI) inflation for September dropped significantly to 5.02 percent, and the Index of Industrial Production (IIP) for August rose impressively to 10.3 percent.
Vijayakumar interprets this as a signal that the Monetary Policy Committee (MPC) could maintain the status quo for the rest of FY24 and potentially opt for a rate cut in the second quarter of calendar year 2024.
As of Friday, the BSE Sensex has declined by 428 points, resting at 65,980 points, with Infosys experiencing a decrease of more than 2 percent.