Global trends, FIIs’ move to dictate trends in markets in holiday-shortened week: Analysts

Stock market participants would track global trends and foreign investors’ trading activity in a holiday-shortened week ahead, amid lack of any major domestic trigger in sight, analysts said.

Equity markets will remain closed on Wednesday for Christmas.

“Looking ahead, no major events are scheduled. However, a few global economic indicators will be pivotal in shaping the market direction, including the US bond yields, dollar index performance, initial jobless claims, new home sales data.

“Amid heightened volatility and persistent Foreign Institutional Investors (FIIs) selling pressure, investors are likely to adopt a cautious stance. Despite recent weakness, the market outlook remains cautiously optimistic. However, relentless selling by FIIs has added to market pressure,” Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said.

Last week, the BSE benchmark tanked 4,091.53 points or 4.98 per cent, and the Nifty slumped 1,180.8 points or 4.76 per cent.

“The sudden change in FII strategy from buying to selling has impacted markets,” V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

The rupee-dollar trend and movement of global oil benchmark Brent crude will also be crucial in dictating the market.

“Looking ahead, the week is shortened due to holiday. Participants will closely monitor FII flow trends and global market performance for direction. Additionally, the scheduled expiry of December’s derivative contracts may amplify volatility,” Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, Indian markets are expected to remain subdued and will closely follow global cues amidst a volatile environment.

“With the festive season approaching and global markets closed for 2-3 days, including a domestic holiday on December 25, market activity is expected to be low this week,” he added.