The new month is expected to open on negative note amid weak global cues. Though micro economic activity remains strong as captured by GST collections, analysts fear elevated higher rate level internationally will check foreign funds’ flow into Indian stock markets.

Gift Nifty at 19575, indicates a gap down opening of over 100 points as Nifty futures on Friday closed at 19709. Most equities across Asia-Pacific region are down in early deal on Tuesday.

Eyes on RBI meet

Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd, said: “While global cues will continue to dictate trends in local markets, focus will shift to RBI’s monetary policy announcement on Friday. Although the market is expecting a status quo on interest rates, global concerns like rising US dollar index and bond yields coupled with surging crude oil prices continue to weigh on investors’ minds. Further, persistent FII selling in emerging markets, including India, in September has taken a toll on markets. If FII outflows gain pace, markets could be in for extended downward spiral, as overseas investors would park their funds in the safe haven dollar securities.’

September has witnessed a clear trend reversal in the behaviour of foreign portfolio investors. “After sustained buying in the previous three months, FPIs have turned sustained sellers in September having sold stocks for Rs 26689 crores in the cash market,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. 

This sustained selling has been in response to steady dollar appreciation which took the dollar index close to 107 and the steady rise in the US bond yields which took the US 10-year bond yield to around 4.7%, he said adding that The spike in the Brent crude to $97 also weighed on FPI selling. 

According to analysts, currently markets lack clear trigger. Participants will closely monitor the micro and macro data that will be out this week.

Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd, said: “The market will take cues from some major domestic and global macroeconomic data such as S&P Global Manufacturing PMI and Services PMI data of different countries, API Weekly Crude Oil Stock, OPEC Meeting, US Factory orders, crude oil inventories, US Initial Jobless claims, India Interest rate decision, RBI Monetary and Credit Information Review, India Forex Reserves, US Non-Farm Payroll, US unemployment rate and auto sales number.”

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