Suryaa Business Desk: International crude oil prices are on the rise again, along with the US Federal Reserve's upcoming key interest rate decisions, Indian stock... Crude oil prices are on the rise again internationally, coupled with key interest rate decisions by the US Federal Reserve, have heightened the vigilance in the Indian stock markets. With the impact of these global developments, it is clear that the markets will have a weak start to the week itself. In the last week, the Nifty 50 and BSE Sensex indices have lost more than two and a half percent, and investors are on high alert. Experts are expressing concern that due to the continuous increase in crude oil prices in the international market, there is a possibility of domestic inflation.
The GIFT Nifty index is trading flat indicating that the benchmark indices Nifty and Sensex will start flat or with slight losses. Tensions in West Asia and worries over crude oil supply are dampening the momentum of global markets. On the other hand, the attention of global market experts is focused on the US Federal Reserve's policy meeting to be held this week. Fears over the Fed Reserve's decision on interest rates to curb inflation are weighing on foreign portfolio investor (FPI) sentiment. If interest rates in the US remain high for a long period of time, there is a threat that funds from developing countries such as India will flow into the US bond markets.
In addition to this, continued sales by foreign corporate investors and second quarter (Q2) financial results of companies are also driving the market movements. Foreign investors have again become net sellers adding pressure on the domestic indices. Market analysts feel that the IT, banking and energy sectors are likely to be volatile today. In the current situation, the financial experts suggest that the stock market investors should take a cautious step. Expectations are emerging that the Indian equity market is likely to bounce back in a positive direction only if there is stability in crude oil prices.