Daijiworld Media Network - Mumbai
Mumbai, Nov 15: Indian stock markets are expected to remain volatile in the coming week as investors closely monitor foreign institutional investor (FII) flows, crude oil prices, Nvidia's quarterly earnings and changing interest rate expectations.
After a strong rally that pushed the Sensex and Nifty higher for 10 consecutive sessions, benchmark indices witnessed profit booking towards the end of last week. However, sustained foreign inflows and resilient corporate earnings helped the markets retain their weekly gains.
The Sensex declined 319 points to close at 81,592 on Friday (November 13), while the Nifty fell more than 155 points to settle at 25,144, snapping its three-session winning streak.
The correction came amid renewed concerns over global artificial intelligence (AI)-related trade, rising crude oil prices and expectations of tighter monetary policy following a sharper-than-expected increase in domestic inflation.
One of the key factors likely to influence market sentiment next week will be the continuation of FII buying. Foreign investors remained net buyers of Indian equities for the 10th consecutive session on Friday, purchasing shares worth Rs 5,736.55 crore, according to provisional NSE data.
Crude oil prices will also remain firmly on investors' radar as geopolitical developments in the Middle East continue to create uncertainty over global energy supplies.
Comments by US President Donald Trump suggesting that the Iran war was effectively over had initially eased concerns and triggered a decline in oil prices. However, fresh attacks on Saudi energy infrastructure and disruptions to shipping through the Strait of Hormuz subsequently pushed prices higher.
Brent crude is currently hovering near $96 per barrel. A further rise in oil prices could weigh on India's macroeconomic outlook, fuel inflation and squeeze corporate profit margins, while a sustained decline could provide support to market sentiment.
Global technology stocks will also be in focus as investors await Nvidia's quarterly earnings announcement scheduled for Tuesday (November 17).
The chipmaker's financial performance and management commentary are expected to influence sentiment surrounding the global artificial intelligence trade.
Any sharp movement in AI-related stocks could also affect Indian equities, particularly technology shares, as investors assess the implications for global growth and the competitive positioning of Indian IT companies.
Meanwhile, rising domestic inflation has brought interest rate expectations back into focus. India's retail inflation accelerated to 6.09 per cent in October from 5.54 per cent in September, breaching the Reserve Bank of India's upper tolerance limit of 6 per cent.
The latest inflation reading has heightened concerns over possible monetary tightening, with several economists anticipating a potential interest rate hike at the RBI's December policy meeting.
Market participants will closely assess the implications of rising inflation for borrowing costs, liquidity conditions and overall economic growth in the coming week.