FPJ News Service MUMBAI

Stock markets across the globe, including India, are learning to live with Trump as leading economists believe that the Trump ‘shock’ is over. Investor-sentiment in India is expected to remain cautions this week amid domestic macroeconomic data (inflation), Q2 earnings, FII activity, and geopolitical developments..

“Investor-sentiment, in general, remains split as one group tend to worry about a bearish market, and the other take advantage of a downtrend by picking up fundamentally strong, but low-valued stocks. Another group, mainly short-term investors often remain sceptical as they fear lower profits in a bearish market,” country head of a leading FII told The FPJ Money. Bullish and bearish sentiments are here to stay, and investors must uphold patience. 

“On the earnings front, quarterly results from prominent companies such as ONGC, Bajaj Finserv, Asian Paints, Tata Steel and Oil India will be closely tracked for sectoral cues,” Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

The rupee-dollar trend and movement of Brent crude, the global oil benchmark, would also be crucial in driving the investor-sentiment. According to an international report of CME Group, currency markets have moved beyond the “Trump shock” that sparked big gyrations earlier in the year, as measures of dollar volatility tumble to levels last seen before the US presidential election. 

On the domestic front, the upcoming release of October's Consumer Price Index (CPI) inflation data will be closely watched, as it is likely to offer investors clearer insights into the future path of interest rates. 

Globally, all eyes will be on the ongoing US government shutdown, which has halted the release of key economic data crucial to investors and policymakers in assessing the actual state of the economy,” Ponmudi R, the CEO of Enrich Money, an online trading and wealth tech firm, said.

“Market direction will depend on upcoming domestic inflation data, FII flows, developments related to the US government shutdown, and progress in trade negotiations involving the US, India, and China,” Vinod Nair, head of research, Geojit Investments, said. 

According to Sebi Chairman Tuhin Kanta Pandey,  the health of India’s primary market remains robust. In FY25, Rs 4.6 trillion was raised through the equity market. In the current financial year, the equity market has raised Rs 2 trillion already. Unique investors have crossed 135 million, up from just 38 million in FY19, indicating their confidence in our markets. 

The market regulator’s investor survey, however revealed that while 63% households are aware of securities products, only 9.5% have invested. Moreover, 80% households remain risk averse, reflecting the fear of loss.  Sebi chief urged the industry to raise capital, create value for all stakeholders, and help define the economic future. 

“The market regulator has, and will continue to streamline the capital raising process. The IPO listing and rights issue timelines have been shortened. The recent proposals for scale based approach in minimum public offer size and calibrated MPS timelines consistent with market absorption capacity and liquidity will enable and encourage more listings. 

“The governance framework for MIIs has been strengthened, ensuring that public interest is given first priority,” Sebi said. Investors must look at the strengths of the domestic economy, and its capital market’s vast pool of funds. India’s mutual fund industry AUM now stands at over Rs 75 trillion. 

Monthly SIP flows of over Rs 280 billion show that awareness about disciplined saving and long term investing is taking deeper roots among Indian households. However, Sebi’s investor survey underlines that despite high awareness of MF products (53%), their penetration remains low at 6.7%. The AUM of mutual funds is still less than 25% of the country’s GDP, while they are over 80% of GDP in many advanced economies.