Fed FOMC: Fed meeting, profit taking among key factors driving market next week

NEW DELHI: India’s benchmark stock indexes have had a bumper week adding to investor wealth as they hit new highs although the bull run was hampered by the reserve of profits towards the end.

Positive economic data and government reforms in the telecommunications, banking and automotive sectors have helped bolster market sentiment. The banking sector, which has now underperformed the rill, came out on top during the week.

Investors around the world will be looking at the Fed’s rate-setting meeting over the coming week for more clarity on the outlook for both the cut and the interest rate review schedules. While the Fed’s planned cut in bond purchases has garnered attention this year, its view of interest rates could provide new clues that could move markets around the world, analysts noted.

Key factors that could guide the markets next week:

Meeting with the American Fed: The US Federal Reserve’s FOMC will meet on September 21-22 to make decisions on its monetary policy. It’s possible that the US Fed is talking about a phased-down schedule, which could be as early as November, which could lead to cautious moves in stock markets globally.

Besides the US Fed, the Bank of Japan will also release its monetary policy on September 22.

Vaccination against covid: Vaccination has gained momentum in India with a total of 80.37 crore doses delivered so far. More than 20 crore of the Indian population are now fully vaccinated. India Inc will keep an eye on the pace ahead. The sooner the country is fully vaccinated, the more it can open up its economy.

IPO: The primary market will also be buzzing with an announcement and the bidding process starting for a new one. Auto component maker Sansera Engineering will make its stock exchange debut on September 24. The shares of Paras Defense and Space Technologies will be up for grabs from September 21 to 23. The price range for the IPO of Paras has been set at Rs 165-175 per share.

FII flow: This is another area that investors will follow. Last week, the FII bought shares with a net worth of Rs 6,900 crore, data available with NSDL showed. They have been very bullish this month with a net equity investment of Rs 11,287 crore. If the trend continues, the national stock market could hit new highs

Beautiful prospects: Nifty50 finished positive for the past week, but posted a reversal bar during the last trading session of the week. Likewise, Bank Nifty also posted a turning point after hitting a new high. In the short term, the market is trading overbought and may experience a slight decline in the future due to profit recognition.

“The overall market position outlook remains bullish until it crosses the 17,500 level, as a break below the same level will put an end to the current momentum. Nifty’s immediate support and resistance is now placed at 17,400 and 17,900 levels, respectively, ”analysts at Samco Research said.

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