India Stock Indices Extend Losses From Past Week

New Delhi: Indian stock market indices extended their losses from the previous week, though marginally, tracking weak US market cues and concerns of over-heating in small and midcaps space.

At 9.19 am, soon after the opening bell, Sensex was at 72,585.93, down 57.50 points or 0.079 per cent, Nifty was at 21,991.85 points, down 31.50 points or 0.14 per cent. Among the widely tracked Nifty 50 stocks, 21 advanced and the rest 29 declined at the time of filing this report.

India's benchmark stock indices snapped a four-week rally and recorded their worst fall in over four months on Friday.

Going ahead into this week, monetary policy outcomes of five central bank, Federal Reserve, the Bank of Japan (BOJ), the Reserve Bank of Australia (RBA), the Swiss National Bank (SNB), and the Bank of England (BOE) will be closely watched. Investors and traders will get some fresh clues on the future glide path of interest rates in these major economies.

"The March Federal Open Market Committee (FOMC) meeting will play a key role in guiding market rates expectations after US equities indices climbed despite higher-than-expected consumer price index (CPI) readings for February," said S&P Global Market Intelligence.

In specific, markets will closely watch Fed Chair Jerome Powell's comments on rate cuts and the US economy's health amid growing concerns of a rebound in inflation. The US Federal Reserve in its January meeting voted to leave the key interest rate unchanged at 5.25-5.50 per cent, keeping the policy rate unchanged for the fourth straight time on a trot.

"Bears may seize control following a weak lead from Wall Street in Friday's trading session, potentially triggering volatility in Nifty as bullish traders scale back amidst anticipation of an impending Fed rate cut. With the Federal Reserve's decision looming on Wednesday, March 20th, market volatility is expected to intensify," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

That said, foreign portfolio investors continue to remain net buyers in India. Foreign portfolio investors who had aggressively sold Indian stocks and turned net sellers in the Indian equity market in January 2024 became net buyers in February and March. This has also likely buoyed the stocks of late. So far in March, they bought stocks in India worth Rs 40,710 crore, the latest data from the National Securities Depository Limited (NSDL) showed.

"The trend of rising foreign portfolio investment in India witnessed in the first week of March continued in the second week, too. FPIs were big sellers in January and modest buyers in February. But in March they have turned big buyers having bought equity worth Rs 35,665 crores through 15th March (Source: NSDL).

But this figure includes some bulk deals executed through the stock exchanges and, therefore, is not a true indicator of FPI activity.