Mumbai: Indian stock markets are likely to move in a range-bound manner in the coming week, according to market analysts. With trading hours reduced due to holidays, investors are expected to remain cautious.
The domestic stock market will remain closed on Thursday due to Christmas, further limiting trading activity.
Several global markets are also expected to see lower participation because of Christmas and New Year holidays, which may keep volumes subdued across regions.
Domestic Data and Currency Movement in Focus
Experts say that on the domestic front, investors will closely track infrastructure output data, along with updates on bank loan growth, deposit growth, and foreign exchange reserves. These indicators will offer clues about the strength of the Indian economy.
The movement of the Indian rupee against the US dollar and changes in crude oil prices will also play a key role in influencing market sentiment during the week.
Global Cues to Guide Sentiment
According to analysts, global market performance—especially in the United States - will be watched closely for direction. Key global data releases such as US and UK GDP figures, US consumer confidence, and US core PCE inflation data are expected to provide insights into the health of the global economy.
Lower-than-expected US inflation data released recently has improved expectations of further interest rate cuts by the US Federal Reserve, which is generally positive for emerging markets like India.
Role of Foreign Investors
Foreign investor activity will be another important factor. Analysts believe that the return of foreign fund inflows could act as a trigger for the next phase of market gains. Recent buying by foreign portfolio investors in two straight sessions has offered some relief after weeks of selling.
Strong domestic liquidity continues to support the market and is helping limit sharp downside risks, experts said.
What Happened Last Week
Last week, the BSE Sensex fell 338.3 points, or 0.39 per cent, while the Nifty declined 80.55 points, or 0.30 per cent. Most sessions saw selling pressure, but a strong recovery on the final trading day helped reduce losses.
On Friday, the Sensex jumped 447.55 points to close at 84,929.36, while the Nifty rose 150.85 points to end at 25,966.40.
Outlook for the Week Ahead
Analysts expect markets to remain sideways with a positive bias. With limited triggers in the near term, investor focus is gradually shifting towards the Q3 corporate earnings season, which could provide clearer direction in the weeks ahead.
