India’s financial markets are facing a period of volatility as the Lok Sabha elections results 2024 approach. The recent weeks have seen a significant crash in equities and debt, with D-Street experiencing multiple blows due to outflows by foreign investors and a rise in market volatility. Analysts predict that weak sentiments will persist until the election results are announced, with no major positive triggers in sight.
Investors are closely watching the ongoing January-March quarter results for fiscal 2023-24, along with domestic and global macroeconomic data, foreign fund outflows, crude oil prices, and global cues. The domestic equity benchmarks have declined by two percent, marking their worst performance since mid-March. The India VIX, which measures market volatility, has been on the rise, adding to the negative sentiment.
Major sectors such as financials, energy, and metals have recorded significant losses, while FMCG, automotive, and IT sectors have shown resilience. The broader indices have also experienced declines, with Nifty Midcap and Nifty Small cap both ending in the red.
The market decline can be attributed to uncertainty surrounding the elections, foreign investor selling, delayed US interest rate cut, muted Q4 earnings, and a substantial increase in the India VIX. Despite this, there is optimism for a potential buying opportunity if Nifty can hold above its previous low.
In the coming week, investors will be focusing on domestic macroeconomic data, Q4 results, new IPOs and listings, FII activity, global cues, oil prices, and corporate actions. Technical analysis suggests a continuation of the negative tone in the Nifty, with key support and resistance levels to watch out for.
Overall, the market outlook remains uncertain, and investors are advised to exercise caution and seek expert advice before making any investment decisions. The upcoming weeks are crucial for the financial markets, with various factors influencing the direction of the market.
