Central bank meetings to set the tone for markets

New Delhi: Many events like the Fed meeting outcome on Wednesday, the spike in the US 10-year bond yield to 4.3 per cent and the possible Sebi directives based on the stress tests in mid- and small-cap schemes will influence the market in the near term, said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The Fed meeting outcome will be keenly watched even though the consensus is no rate action. If the Fed message has any slightly Hawkish tone in response to the recent stubborn inflation trend, that would be negative for the mother market and consequently, for other markets too. The spike in US 10-year bond yield to 4.3 per cent is negative for foreign portfolio flows, he said.

The concern regarding the elevated valuations in the mid- and small-caps continues despite the stability witnessed in these segments last Friday. Investors may adopt a wait-and-watch strategy and may buy large-caps in capital goods, banking, telecom and automobiles on dips, he said.

Deepak Jasani, Head of Retail Research, HDFC Securities said that Asian shares rose on Monday as Chinese data surprised on the upside for once, while investors looked to navigate a minefield of Central bank meetings this week that could see the end of free money in Japan and a slower glide path for U.S. rate cuts.

“We have three Central bank meetings in the coming week including the US Fed meeting on March 20. The outcome of these could influence the global market trajectory,” he said.

BSE Sensex is trading at 72,488.63 points down by 154.8 points. Titan, Nestle, Asian Paints are down more than 1 per cent.