According to experts, the US Fed is expected to start its rate cut cycle in September and historically, rate cut cycles in the US market have not been conducive to their equity markets.
Expected volatility in stocks is also linked to the release of August payroll data for the US, which will include revised figures for the previous two months. This data, over the weekend, is expected to be a significant market mover.
Market experts also pointed out that Indian markets may see a minor correction this week after a record 12 consecutive days of positive moves.
“September starts with a Fed rate cut and expected volatility around the event. Lower market this week, mostly due to some reversion after 12 record-breaking consecutive positive moves,” said Ajay Bagga, banking and market expert.
On the foreign investment front in Indian stocks, data showed that net foreign investment in the Indian equity market fell to Rs. 7,320 crore, which represents the lowest monthly investment in the last three months.
According to data from the National Securities Depository Ltd (NSDL), the decline is particularly sharp compared to July, where foreign portfolio investors (FPIs) invested Rs. 32,365 crore had been invested.
Throughout August, foreign investors were mostly net sellers in the Indian equity market, according to NSDL data. However, there was a significant change on Friday, August 30, when FPIs in a single day raised Rs. 14,518.14 crore net investment, making the overall monthly investment positive.
However, overall sentiment in Indian markets remains positive, with potential new investments balanced against profit-taking.
On Friday, both the indices Sensex and Nifty touched fresh record highs and later closed 0.3 percent higher at 82,365.77 points and 25,235.90 points respectively, slightly below their record highs. (ANI)
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