Weekly market update, May 10, 2024

Indian equity indices declined this week, and snapped two straight week of gains, primarily influenced by weak domestic signals. The prevailing uncertainty surrounding the general elections, continued selling by foreign investors, the delay in a US interest rate cut, muted fourth-quarter earnings, and a substantial increase in the India VIX, which increased by nearly 26 per cent this week, have all contributed to the market’s decline. For the week ended May 10, the Sensex and the Nifty 50 ended about 2 per cent lower each, while the BSE Midcap and Smallcap indices fell 3 per cent and 4 per cent, respectively. Most sectoral indices ended the week lower but Nifty FMCG, Nifty Auto, and Nifty IT outperformed.

Analysts expect volatility to continue, and the ongoing the January-March quarter results for fiscal 2023-24 (Q4FY24), domestic and global macroeconomic data, foreign fund outflows, crude oil prices, and global cues will be major driving factors for determining movement in the domestic equity market in the third week of May 2024.

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