NEW DELHI: After Friday’s less than flattering performance, the Indian stock markets are expected to keep an eye out on all the usual suspects — crude oil prices and rupee trends —while also tracking developments in domestic NBFCs and interest rate changes in the US.
The sector, especially housing finance firms like DHFL and IndiaBulls, led the rout on Friday, when the Sensex crashed by more than 1,300 points from the session high before recovering to close down by 280 points. The sharp fall and recovery, which happened within the space of an hour, has spooked investors.
Though Sunday’s statement from the RBI and SEBI that they are keeping a close watch on the market could assuage fears.
Apart from contagion concerns, the next week is set to be driven by cues from how crude oil pieces and the rupee perform. The latter had a relatively better day on Friday, closing at 72.20 per US dollar.
Markets will also take global cues from the US Federal Open Market Committee’s (FOMC) decision on interest rates, while developments in the US-China trade war will be closely monitored.
“In an increasing interest rate scenario (such as current times), a higher proportion of shorter tenure funding against a higher proportion of long term assets, would be harmful. Further, with the events such as IL&FS default, the situation gets aggravated squeezing the liquidity from the money markets,” pointed out Jagannadham Thunuguntla, Sr. VP and Head of Research (Wealth), Centrum Broking Limited.