Weekly market update, Sep 22, 2023

Domestic equity indices snapped three weeks of advance and declined this week. The S&P BSE Sensex fell 2.70% and NSE Nifty 50 was lower by 2.57%, this week. The gains in the US Treasury yields, dollar and crude oil prices dealt a blow to market sentiment as investors tried to digest the possibility of one more rate hike by the US Fed by the end of this year. The broader market indices; the S&P BSE MidCap Index was down by 1.71%, whereas S&P BSE SmallCap Index was lower by 2.04%. On sectoral front, All sectors dropped this week with realty, metal and bank sectors declining the most.

Meanwhile, JP Morgan said on Friday that Indian government bonds will be included in the Government Bond Index-Emerging Markets index and the index suite. The inclusion will start on June 28, 2024, and extend over 10 months with 1% increments on its index weighting. India is expected to reach the maximum weighting of 10%. The index inclusion could result in inflows of about $24 billion into eligible government bonds from the start of next year to May 2025.

Analysts expect that global trends, trading activity of foreign investors and movement of oil benchmark Brent crude would influence the domestic markets in the coming week. As the coming week marks the September month Futures and Options (F&O) expiry, which may bring some volatility in the market. Markets will also take further cues from some key events such as the US GDP data, UK GDP and Eurozone inflation.

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