Sensex and Nifty plummeted around 4.5 per cent last week, making investors poorer by Rs 16.26 lakh crore in five days. So all eyes are on whether the Indian equity markets bounce back or decline further this week.
Rs 4,60,89,598.54 crore of market valuation was eroded from the companies listed on the Bombay Stock Exchange. In the first three trading sessions in October, foreign investors offloaded equities worth Rs 27,142 crore from Indian markets. Several factors contributed to last week's market decline: the escalating tensions in the Middle East, rising crude oil prices and a resurgent Chinese market.
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The main driver on Dalal Street this week will be how the Middle East crisis pans out on the one-year anniversary of 2023 Hamas attack on Israel on October 7. Both Israel and Iran has threatened each other with retaliation following Tel Aviv's killing of Hezbollah chief Hassan Nasrallah and Tehran's firing of missiles targeting Mossad and IDF security establishments. If Middle East tensions affect the crude oil prices further, it could have an impact on domestic inflation and drive market sentiments.
Another factor is the RBI Monetary Policy Committee's decision on interest rates. The Reserve Bank panel is unlikely to slash the rates despite similar moves by the US Federal Reserve and other central banks. Read more about it HERE.
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With Chinese market improving its performance, foreign investors could withdraw more funds from Dalal Street. However, a rebound Indian market could reverse the trend.
TCS will release its Q2 earnings report this week and the results could impact the Nifty IT index, which declined amid last week's correction.
US stock market indices soared on Friday after a labour report raised optimism in the jobs market, with Dow Jones closing at a record high, while Nasdaq posted more than 1 per cent jump.