New Delhi
India’s equity market took a significant hit last week, ending a three-week streak of gains. The Nifty index fell by 1.52%, and the Sensex dropped by 1.43% from September 2 to September 6.
The decline was largely driven by weaker global signals. U.S. job data that missed expectations raised fears of a potential global economic slowdown. Furthermore, India’s weight in the MSCI Emerging Markets index has now exceeded China’s, reaching an all-time high. This increase could lead to a reduction in allocation due to India’s relatively high market valuations, according to experts.
Looking ahead, several factors will influence the market. The U.S. Federal Reserve’s upcoming meeting in mid-September is anticipated to be a key event, with expectations of an interest rate cut. Domestically, the release of August’s inflation figures on September 12 will be closely monitored. Additionally, fluctuations in the Rupee against the dollar, crude oil prices, and the investment patterns of foreign and domestic institutional investors will be crucial.
Technical analysts suggest that if the Nifty index drops below 24,850, it could fall further to 24,000. For Nifty Bank, 50,500 is seen as an important support level, with potential declines to 49,800 if it breaks below this point.
