NEW DELHI: Market investors are likely to look towards developments in the geopolitical sphere to drive their equity transactions over the coming week, according to analysts from Indian brokerages. Several factors, such as changes in the India-China border tensions, are likely to be the driving force behind both Indian benchmark stock indices—BSE Sensex and NSE Nifty.
Both benchmarks saw a good recovery last week after a correction of over 2.5 per cent in the previous week.The BSE Sensex rose 497.37 points or 1.30 per cent, while the NSE Nifty gained 130.60 points or 1.15 per cent during the trading week ended September 11.
However, the past week’s rally had been disproportionately driven by the massive rise in heavyweight Reliance Industries Ltd., which announced a large investment into its retail ventures. Going forward, however, the India-China row is likely to be the primary driving force.
“With the lack of any official statements from the high level talks to defuse border tensions, investors need to be prepared for slow progress in this regard. As such, this uncertainty will keep worrying the markets for the short term,” Vinod Nair, Head of Research at Geojit Financial Services, said.
Both India and China had last week agreed on a five-point plan to resolve the border tensions in eastern Ladakh. Whether there is any real disengagement of forces on the LAC will be keenly watched.