Nifty 50 set to hit new peak: Here's why
What's the story
The Nifty 50 index is gearing up to hit a new all-time high next week, thanks to six key factors. These include expectations of a US Federal Reserve rate cut, easing Foreign Institutional Investor (FII) selling pressure, robust domestic earnings, and progress in trade negotiations. The optimism comes after the benchmark index nearly touched a new peak last week before retreating on mild profit-booking by investors.
Rate cut hopes
Fed rate cut likely to boost emerging markets
The US inflation data released on Friday was lower than expected, strengthening hopes of a 25-basis-point rate cut at the Federal Reserve's meeting starting October 28. The market is also factoring in the possibility of more cuts in December and January. Such moves usually favor emerging markets like India by increasing foreign capital inflows and investor risk appetite.
Trade negotiations
US-India trade talks progress amid crude oil price surge
Reports indicate that India and the US are close to finalizing a trade agreement, which has boosted investor optimism. However, Commerce Minister Piyush Goyal's statement that India won't rush into deals with restrictive terms has tempered enthusiasm. Meanwhile, crude oil prices have surged 5% after new US and EU sanctions on Russian oil majors. Indian refiners are preparing to cut imports of Russian oil to comply with these sanctions.
Trade breakthrough
US-China trade deal hopes could influence market
Markets are hopeful that the upcoming meeting between President Donald Trump and Chinese President Xi Jinping could lead to a US-China trade deal. Analysts expect the US to take a softer stance, considering China's strategic leverage in rare earth minerals and magnets essential for global manufacturing. This potential development could further shape market direction next week.
Earnings focus
Q2 results and FII-DII flow in focus
Investors are keenly watching second-quarter results, which have so far exceeded expectations. The defense sector will be in the limelight as Mazagon Dock and Bharat Electronics Ltd (BEL) report results, with a focus on government orders and new contracts. Meanwhile, foreign investor sentiment has shown early signs of stabilizing after months of selling. On October 24, FIIs turned net buyers of Indian equities worth ₹621 crore while DIIs remained net buyers at ₹173 crore.