New Delhi, Aug 10: As the Indian stock markets experienced a marginal recovery from the uncertainties stemming from weak global cues last week, the direction of the benchmark indices will be influenced by international markets going forward, experts said on Saturday. Geopolitical tensions, weak US non-farm job data and Bank of Japan’s monetary policy decision weighted on all world markets, including India. There will be uncertainties over the unwinding of carry trades, driven by the Yen's rapid appreciation and weak macroeconomic data that fuelled recession fears in the US.
According to market watchers, while the carry trade issue appears to have been eased for now, a gradual increase in interest rates by the Bank of Japan could have some impact in the near future. The Indian market also witnessed broad-based buying across sectors last week, with the realty sector seeing a relief rally due to the reinstatement of indexation benefits.
Though FIIs have been net sellers in the Indian markets for the last month, strong inflows from DIIs and retail participants have absorbed the selling pressure from FIIs, according to experts. The RBI kept its policy rate unchanged as per expectations. However, the overall tone was slightly hawkish, including an expectation of upward revision in CPI, which hints at caution.
According to Pantomath Capital Advisors, the Indian IPO market has demonstrated remarkable resilience and growth, making it a focal point for investors worldwide. In the first half of the calendar year 2024, India emerged as the most active market for IPOs.
“As per our analysis, we anticipate that this trend will continue in the second half of the calendar year, driven by a surge in liquidity events. India's robust economic growth serves as a key driver, fostering business expansion and bolstering investor confidence,” said analysts. Indian inflation data is due next week and the inflation is expected to be moderate. Experts advised investors to shift their focus from growth stocks to value stocks.
