Indian Markets Watch: Impact of US Elections and Foreign Fund Outflows
In the past week, Indian stock markets experienced range-bound consolidation, with experts predicting continued sensitivity to foreign fund outflows and a subdued earnings season. Investors are closely monitoring the US elections, featuring Kamala Harris and Donald Trump, and the Federal Reserve’s policy meeting on November 8.
Domestic Market Focus
Ajit Mishra, SVP of Research at Religare Broking Ltd, highlighted the importance of upcoming earnings reports from major companies like Dr. Reddy’s, Titan, Tata Steel, M&M, Tata Motors, and Asian Paints. Key economic indicators such as the HSBC Manufacturing PMI, Composite PMI, and Services PMI will also provide insights into India’s economic momentum.
Market Performance and Investor Sentiment
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that while the Nifty at the National Stock Exchange (NSE) gained 25% over the last Samvat year, a 6.2% correction in October has caused investor anxiety. He advised focusing on stock-specific investments with strong Q2 results and earnings visibility.
Foreign Portfolio Investors’ Activity
Foreign portfolio investors (FPIs) turned net sellers in October, offloading stocks worth Rs 94,017 crore, the highest-ever in a month. This follows four months of net buying, with significant purchases in June, July, August, and September.
Market Trends and Sector Performance
Despite volatility, the markets ended slightly higher last week, breaking a four-week losing streak. The Diwali special trading session boosted the Nifty and Sensex, closing at 24,304.30 and 79,724.12, respectively. Sectors like metals, real estate, and banking showed strength, while IT underperformed. The small-cap index gained over 5%, offering some relief to investors.
Upcoming Financial Results
Investors are keenly awaiting the second quarterly financial results of companies such as IRFC, GAIL, Tata Steel, Trent, and Asian Paints in the coming week.
Doubts Revealed
US Elections -: US Elections are when people in the United States vote to choose their leaders, like the President. These elections can affect other countries, including India, because the US is a big and powerful country.
Foreign Fund Outflows -: Foreign Fund Outflows happen when investors from other countries take their money out of Indian markets. This can affect the stock market because less money is available for companies to grow.
Federal Reserve -: The Federal Reserve is like a big bank in the United States that helps control the country’s money and interest rates. Its decisions can impact economies around the world, including India.
Nifty -: Nifty is a stock market index in India that shows how the top 50 companies are doing. It’s like a report card for the stock market.
Correction -: A correction is when the stock market goes down after it has been going up for a while. It’s like a pause or a small drop in prices.
Foreign Portfolio Investors -: Foreign Portfolio Investors are people or companies from other countries who invest in Indian stocks and bonds. They can influence the market by buying or selling large amounts of stocks.
IT Sector -: The IT Sector includes companies that work with technology, like making software or providing tech services. In this context, it means these companies didn’t do as well as others in the stock market.
