Fed Decision, 104 Dollar Crude In Focus Next Week, Nifty Near Key Support After 5 Week Losing Streak

Mumbai: Indian equities are set for a volatile holiday-shortened week as investors track the US Federal Reserve’s interest rate decision, elevated crude oil prices and other global monetary policy signals. The Nifty enters the week near a crucial support zone after declining for five consecutive weeks.

Domestic markets will remain closed on Monday for Ganesh Chaturthi, leaving investors to react on Tuesday to developments in global equities, crude oil and bond yields.

Fed Decision Takes Centre Stage

The biggest global trigger will be the US Federal Reserve’s policy decision and economic projections on Wednesday, September 16. The announcement is scheduled for 2 pm EDT, or 11:30 pm IST.

Markets are pricing in a strong probability of a 25 basis point rate hike after the latest US inflation numbers. Headline consumer inflation rose 0.4 per cent month on month and remained at 3.4 per cent annually, while core inflation increased 0.3 per cent sequentially but eased to 2.4 per cent year on year.

For Indian equities, the Fed’s commentary and outlook could prove more important than the rate decision itself. Balanced guidance could provide some relief to risk assets.

The Bank of England and Bank of Japan policy decisions will also remain on investors’ radar.

Nifty Extends Weekly Decline

The Nifty ended Friday at 23,398.10, down 79.70 points or 0.34 per cent, while the Sensex slipped 120.83 points, or 0.16 per cent, to 74,781.76.

The Nifty touched a three-month low during the week. Nifty Bank extended its decline to a third straight week, while weakness also spread to midcap and small-cap stocks.

Realty was among the biggest sectoral laggards, while healthcare and pharmaceutical shares showed relative strength.

Crude Above 104 Dollars Adds Pressure

Brent crude settled at 104.61 dollars a barrel after briefly approaching 110 dollars, adding to concerns over inflation, corporate margins and India’s import bill.

With crude remaining elevated and the Fed decision approaching, global cues are likely to dictate market direction during the shortened trading week.