INSUBCONTINENT EXCLUSIVE:
The direction of foreign fund flows is likely to impact the trajectory of equity market.The Central government's measures to arrest the
drastic fall in rupee are expected to steer the equity market trajectory next week.In addition, market observers opined that high crude oil
prices along with global cues on trade protectionist measures will impact investors' risk-taking appetite.However, a positive reaction is
expected from investors on the various measures announced by Finance Minister Arun Jaitley to curb the widening current account deficit,
fiscal deficit target even as it monitors the impact of external factors on the Indian economy.Devendra Nevgi, Founder and Principal
Partner, Delta Global Partners, said: "Next week's sentiment would be dominated by the announcements made by the government to rein in
current account deficit and encourage foreign flows."Measures taken, though not drastic, would have a soothing effect on the INR sentiment
in the short term but would not open the floodgates for foreign flows."In recent days, geo-political developments over trade protectionist
measures along with high crude oil prices and outflows of foreign funds have pulled the Indian rupee to fresh record intra-day and closing
lows."Despite sharp fall in rupee and consolidation in domestic markets, we are outperforming other emerging markets
The reasons for this are revival in domestic earnings growth, better economic data and softening of CPI," said Vinod Nair, Head of Research
at Geojit Financial Services."However, some risk factor like surge in oil prices, strengthening of dollar and escalation of trade wars are
creating headwinds for the markets
Considering this, market is expected to be volatile in the near term
fresh low of 72.91 a US dollar
However, towards the end of the week it recovered to close at 71.85 on Friday, weaker by 12 paise from its previous week's close of 71.73
per greenback."Unless some fresh measures are announced next week, risk remains that rupee can depreciate once again
The just announced measures, though are significant in streamlining inflows through the respective markets, will do little to help the rupee
trend of EM currencies against USD, oil prices and RBI intervention
We expect volatility to increase and a wide range of 71.50 to 73 is expected over next week."Besides, the direction of foreign fund flows is
likely to impact the trajectory of equity market.In terms of investments, provisional figures from the stock exchanges showed that foreign
institutional investors sold scrip worth Rs 2,291.87 crore in the past week.Figures from the National Securities Depository (NSDL) suggested
that foreign portfolio investors (FPIs) divested Rs 3,076.38 crore, or $424.03 million, in the equities segment during the week ended
September 14.On technical levels, the underlying intermediate trend of the National Stock Exchange (NSE)'s Nifty50 "remains
up"."Technically, while the Nifty has corrected this week, the intermediate trend of the Nifty remains up," said Deepak Jasani, Head of
Retail Research for HDFC Securities."The uptrend is likely to resume once the immediate resistance of 11,760 points is taken out
Crucial supports to watch on the downside are at 11,431-11,250 points."On a weekly basis, persistent depreciation in the Indian rupee along
with high crude oil prices pulled the domestic equity market lower for the second consecutive week.Consequently, the barometer SP BSE Sensex
closed at 38,090.64 points, lower 299.18 points or 0.77 per cent from its previous close.Similarly, the wider Nifty50 on the National Stock
Exchange on Friday ended at 11,515.20 points, down 73.9 points or 0.63 per cent from the previous week's close.(Except for the headline,
this story has not been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
