Any timelines for tapering measures in the US can potentially drive FPIs away from emerging markets such as India, say analysts
Sky-high valuations along with global tapering fears will impact stock market movements during the upcoming week.
Accordingly, market observers, pointed out high possibility of profit booking led slide on the back premium valuations and likely absence of positive domestic triggers.
Nonetheless, key indices -- S&P BSE Sensex and NSE Nifty50 -- are expected to reach new intra-day record highs of 60,000 points and 18,000-mark, respectively.
Last Friday, the Sensex closed at 59,015.89 points after making an intra-day record high of 59,700, while Nifty ended the day's trade at 17,585.15 points.
It had breached the 17,790 level intra-day on last Friday.
"Broad market correction amidst high volumes gives the first hint of distribution," said Deepak Jasani, Head of Retail Research, HDFC Securities.
"An adverse US Fed meet outcome next week could accelerate the correction that is typical in September, especially in the US markets."
According to Motilal Oswal Financial Services' Retail Research Head Siddhartha Khemka: "Valuations are not comfortable and hence could lead to bouts of profit booking. The weak global cues on account of worry over slower economic growth and rising Delta variant cases globally would keep market oscillating between greed and fear."
"Nervousness would be seen in the market next week ahead of Federal Reserve and ECB meeting, which could provide some indications on when the central banks will start withdrawing their monetary stimulus and start raising interest rates eventually."
Any timelines for tapering measures in the US can potentially drive FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
Significantly, the recent sizeable inflow of FPI funds has been credited to have lifted the domestic markets to record high levels.
In addition, Geojit Financial Services' Research Head Vinod Nair said: "In the coming week, the global focus will be on the policy meetings of a few central banks including the Fed."
"With weak US job data and inflation increasing at a slower pace, Fed is not expected to hint on taper plans in the upcoming meeting."
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.