Talking Point: Global cues to drive investor sentiment in wake of US polls

“The focus in the next week will be completely on the November 8 outcome of the US elections. The uncertainty will keep the markets on edge till the outcome and so, safe haven assets will continue to outperform,” Devendra Nevgi, Chief Executive of Zyfin Advisors, opined.

Besides, the direction of foreign fund flows, along with the ongoing quarterly results will be other major themes to look out for during the week starting November 7. Other important global cues such as nonfarm payrolls data and crude oil price movement are also expected to be keenly followed by investors, market analysts like him have observed.

“The market may remain volatile with global concerns overhang. Support is seen near 8,400 levels. Besides, market sentiment will be dictated by investment trend of overseas and domestic investors, movement of the rupee and crude oil prices,” said DK Aggarwal, CMD, SMC Investments and Advisors. 

The reaction to the decline in US macro-statistics on non-farm payrolls data, especially given the impending rate hike scenario in December will be another major theme for the coming week. The US Bureau of Labor Statistics reported that the total non-farm payroll employment increased by 161,000 last month, whereas the unemployment rate was little changed at 4.9 per cent. The lower-than-expected data assumes significance as it can hamper the start of the next rate-hike cycle expected in December. A hike in the US interest rates can potentially lead Foreign Portfolio Investors away from emerging markets such as India. 

“The lower than expected US non-farm payroll figures could dilute Federal Open Market Committee rate hike expectations for December,” Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services. The ongoing second-quarter earning results will be watched for sector specific developments.