Investors on Dalal Street may see volatility in the week ahead and will
wait for cues from the US markets, which might get a booster doze in
the form of interest rate cut from the Federal Reserve, analysts said.
The
benchmark BSE Sensex lost 168 points in the past week at 15,590.42
points on Friday. Meanwhile, US benchmark index Dow Jones Industrial
Average (DJIA) fell nearly 250 points to end at 13,113.38 points, while
Nasdaq-100 also closed down 49 points at 2,565.70 points.
The US
markets had declined after the jobs data came in far worse than
expected, threating to throw the economy into a recession. American
employers dismissed 4,000 workers last month, marking a sharp change of
direction from the 68,000 jobs that had been created in July.
In
a research note, global financial services major Citigroup expects US
Federal Reserve to lower interest rates by 75 basis points before the
end of the year, with the first cut coming on or even before the
scheduled meeting of Federal Open Market Committee on September 18.
"Our
global strategists have concluded that Fed cuts should be supportive
for equities performance, with non-US markets outperforming...
Instances of Fed rate cuts have been meaningfully positive for Indian
equities as well, especially on 12-24 month time horizons," Citigroup
analyst Ratnesh Kumar said in the India Equity Strategy report.
Even
in an extremely pessimistic scenario of a recession in the US, massive
rupee appreciation and sharp slowdown in domestic growth, Citigroup
does not see an earning collapse in India, "due to strong and
broad-based growth momentum in the Indian economy".
Besides,
Foreign Institutional Investors again embarked on a buying spree in the
equities market in September after a month of net sale in August. In
the first week of September, FIIs purchased equities worth Rs 2,869
crore and Rs 752 crore in the debt markets.
"The trend taken by the FIIs in the coming week could be crucial for the direction market takes," an analyst said.
Domestic
mutual funds were also net buyers worth Rs 353.80 crore in equity
market during four trading sessions from September 3 to September 6.
The
markets would also be watching the outcome of the negotiations between
the UPA government and its Left allies on the Indo-US nuclear deal.
wait for cues from the US markets, which might get a booster doze in
the form of interest rate cut from the Federal Reserve, analysts said.
The
benchmark BSE Sensex lost 168 points in the past week at 15,590.42
points on Friday. Meanwhile, US benchmark index Dow Jones Industrial
Average (DJIA) fell nearly 250 points to end at 13,113.38 points, while
Nasdaq-100 also closed down 49 points at 2,565.70 points.
The US
markets had declined after the jobs data came in far worse than
expected, threating to throw the economy into a recession. American
employers dismissed 4,000 workers last month, marking a sharp change of
direction from the 68,000 jobs that had been created in July.
In
a research note, global financial services major Citigroup expects US
Federal Reserve to lower interest rates by 75 basis points before the
end of the year, with the first cut coming on or even before the
scheduled meeting of Federal Open Market Committee on September 18.
"Our
global strategists have concluded that Fed cuts should be supportive
for equities performance, with non-US markets outperforming...
Instances of Fed rate cuts have been meaningfully positive for Indian
equities as well, especially on 12-24 month time horizons," Citigroup
analyst Ratnesh Kumar said in the India Equity Strategy report.
Even
in an extremely pessimistic scenario of a recession in the US, massive
rupee appreciation and sharp slowdown in domestic growth, Citigroup
does not see an earning collapse in India, "due to strong and
broad-based growth momentum in the Indian economy".
Besides,
Foreign Institutional Investors again embarked on a buying spree in the
equities market in September after a month of net sale in August. In
the first week of September, FIIs purchased equities worth Rs 2,869
crore and Rs 752 crore in the debt markets.
"The trend taken by the FIIs in the coming week could be crucial for the direction market takes," an analyst said.
Domestic
mutual funds were also net buyers worth Rs 353.80 crore in equity
market during four trading sessions from September 3 to September 6.
The
markets would also be watching the outcome of the negotiations between
the UPA government and its Left allies on the Indo-US nuclear deal.
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