US Fed interest rate decision, tariff-related developments to drive mkt movement this week: Analysts

Synopsis

The US Fed interest rate decision, global trends, tariff-related developments and trading activity of foreign investors will drive the equity market movement this week, analysts said. Among macroeconomic data announcement, WPI inflation for February is scheduled to be announced on Monday.

The US Fed interest rate decision, global trends, tariff-related developments and trading activity of foreign investors will drive the equity market movement this week, analysts said. Among macroeconomic data announcement, WPI inflation for February is scheduled to be announced on Monday.

"Persistent uncertainties surrounding global trade and the fear of a US recession may continue to influence the domestic market's momentum," Vinod Nair, Head of Research, Geojit Financial Services, said.

However, the moderation in valuations following recent corrections, along with supportive factors such as falling crude oil prices, an easing dollar index, and expectations of a rebound in domestic earnings in the coming quarters, may limit the volatility and is expected to contribute to stability amid prevailing trade uncertainties, he said.

"This week's release of China's retail sales growth data and industrial production data will provide a clearer understanding of the Chinese economic growth outlook," Nair said.

Investors will also be closely monitoring US retail sales and production numbers, he added.

Among other global events, the BoE (Bank of England) interest rate decision will also be tracked.

Escalation in global trade tensions and the US recession worries significantly weighed on investor sentiment last week.

"Last week, the Nifty-50 ended lower by 0.7 per cent at 22,397 level on account of weak global cues resulting from the uncertainty around US trade policies.

"This week, we expect the market to remain range-bound with some volatility and sector rotation, driven by global market trends and ongoing developments in the US tariff policies," Siddhartha Khemka, Head-Research, Wealth Management, Motilal Oswal Financial Services, said.

In a holiday-shortened last week, the BSE benchmark Sensex declined 503.67 points, or 0.67 per cent, while the NSE Nifty dipped 155.21 points, or 0.68 per cent.

"Investors are nervous about the likely imposition of tariffs on Indian goods by the Trump administration and its overall impact going ahead, hence caution with a negative bias could prevail for some more time," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

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