Shillong, October 29: Vinod Nair, Head of Research at Geojit Financial Services, notes that in the short term, market sentiment is cautious as investors closely monitor developments in West Asia, upcoming corporate earnings, and key economic data, including domestic PMI figures.
As per IANS, ongoing unrest in West Asia and concerns about the potential impact of higher interest rates on future economic growth have led to a decline in investor confidence. Foreign Institutional Investors (FIIs) selling has been influencing the domestic market, in contrast to heavy buying by Domestic Institutional Investors (DIIs).
Although domestic indices have shown some recovery in the last trading day of the week, favorable factors such as the US Q3 GDP growth and moderating US inflation, which led to a decrease in bond yields, have played a role.
Decent Q2 results in India, in line with optimistic estimates, may support the market’s rebound. However, global market volatility is expected to delay the domestic market’s recovery trend, given concerns about the global economy’s potential slowdown due to elevated interest rates and geopolitical tensions.
Amid ongoing market consolidation, sectors like FMCG, consumption, fertilizers, and core segments such as infrastructure and housing are expected to offer growth opportunities. Factors contributing to this include risk mitigation regarding raw material costs and a stable long-term demand outlook from external sectors, which may specifically benefit sectors like Chemical and Pharma in the medium term.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, highlights that the US Fed’s rate decision and the BOJ’s meeting outcome are key events to watch. The market is expected to continue with its volatile movements, influenced by significant economic events and the ongoing earnings season.