D-Street outlook: profit booking, global volatility to impact inventory movements

MUMBAI: Skyrocketing valuations as well as global downside fears will impact equity market moves over the coming week.

As a result, market watchers pointed to the strong possibility of profit booking leading to lower return premium valuations and the likely absence of positive domestic triggers.

Nevertheless, the key indices – S&P BSE Sensex and NSE Nifty50 – are expected to reach new intraday highs of 60,000 points and 18,000 points, respectively.

Last Friday, the Sensex closed at 59,015.89 after hitting an intraday high of 59,700, while Nifty ended the day at 17,585.15.

It had crossed the intraday level of 17,790 last Friday. “A broad market correction amid high volumes gives the first hint of distribution,” said Deepak Jasani, head of retail research, HDFC Securities.

“An unfavorable outcome of the US Fed meeting next week could accelerate the typical September correction, particularly in US markets.”

According to Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services: “Valuations are not comfortable and therefore could lead to periods of profit booking between greed and fear.”

“The jitters will be felt in the market next week ahead of the Federal Reserve and ECB meeting, which could provide indications of when central banks will begin to withdraw their monetary stimulus and possibly start to increase. interest rates.”

Any timetable for reducing measures in the United States has the potential to drive REITs (Foreign Portfolio Investors) away from emerging markets such as India.

Significantly, the recent large inflow of REIT funds has been credited with driving domestic markets to record highs.

Additionally, Vinod Nair, Head of Research at Geojit Financial Services, said, “Over the coming week, global attention will be on policy meetings from a few central banks, including the Fed.”

“With weak US jobs data and inflation rising at a slower pace, the Fed is unlikely to hint at cutback plans at the next meeting.”