India-Pakistan tensions, combined with the direction of foreign fund flows

crude oil price fluctuations and a likely decline in India's weightage

Easing India-Pakistan tensions, combined with the direction of foreign fund flows and the rupee’s movement against the dollar, will steer the equity market’s trajectory in the coming week.
According to market observers, lower-than-expected gross domestic product (GDP) figures, crude oil price fluctuations and a likely decline in India’s weightage in the MSCI Emerging Market Index might impact investors’ sentiments.

“Going forward, the market will continue to track global markets along with military operations on the Indo-Pak border,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.

According to Vinod Nair, Head of Research, Geojit Financial Services, the market is likely to trade with a positive bias on account of ease in border tensions and expectation of the US-China trade agreement.

“In terms of valuation, if we look at the Nifty500, about 60-65 per cent of stocks are currently below or in-line with 7-year average valuations on the trailing price/earnings ratio (P/E) basis, which is very attractive,” said Mr Nair.

“Investors will continue to look at high quality mid- and small-caps. Whereas rate sensitive stocks are likely to be in limelight on expectation of a rate cut given slowdown in the Q3 GDP growth.”

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