The Fed’s decision on U.S. interest rates is a key factor for markets this week: analysts

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Stock markets will be lifted by the outcome of the US Federal Reserve’s interest rate decision this week, analysts said.

In addition, equity benchmarks will also continue to be guided by foreign fund movements and the Brent crude oil trend, they added.

“Global markets look jittery after US inflation data sent the dollar index hovering around 110,” said Santosh Meena, head of research at Swastika Investmart Ltd.

Now everyone is watching the outcome of the upcoming US Federal Open Market Committee (FOMC) meeting. The Bank of England will also announce its decision on interest rates, Meena said.

He further added that institutional flows will play a vital role as foreign investors have become sellers in the Indian stock market.

“In the absence of major national data and events, participants will be watching the U.S. Fed meeting closely. In addition, the trend of foreign flows would also remain on their radar,” said Ajit Mishra, vice president of Research, Religare Broking Ltd.

Last week, the Sensex lost 952.35 points or 1.59%, while the Nifty fell 302.50 points or 1.69%.

The 30-share BSE Sensex was down 1,093.22 points or 1.82% to settle at 58,840.79 on Friday, reflecting a sell-off in global markets.

Despite its strong decoupling scenario and encouraging macro data, domestic stock markets succumbed to the global upward trend in bond yields and the dollar index due to fears of rising rates in the global market, Vinod said. Nair, head of research at Geojit Financial Services.

Apurva Sheth, Head of Market Outlook at Samco Securities, said: “The FOMC meeting and press conference will be the center of attention this week. Globally, the Fed’s interest rate decision may trigger market concerns. Although India has done significantly better than all of the other major markets, it is expected to remain volatile.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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