Fed Decision, 104 Dollar Crude In Focus Next Week, Nifty Near Key Support After 5 Week Losing Streak

Indian equities are heading into a turbulent shortened week as investors monitor the US Federal Reserve's interest rate announcement, high crude oil prices, and other global monetary policy cues. The Nifty enters the week near an essential support level after a five-week losing streak. Domestic markets will be closed on Monday for Ganesh Chaturthi, leaving traders to respond on Tuesday to global equities, crude oil, and bond yields developments.

The biggest global trigger will be the US Federal Reserve's policy decision and economic projections on Wednesday, September 16, at 2 pm EDT (or 11:30 pm IST). Markets are currently pricing in a high likelihood of a 25 basis point rate increase following the latest US inflation data. While the Fed’s commentary and outlook may be more crucial for Indian equities than the rate decision itself, a balanced guidance could provide some relief to risk assets.

Foreign Institutional Investors sold ₹1,602 crore worth of Indian equities this week, with the Nifty declining 0.5% amid market volatility. The Bank of England and Bank of Japan's policy decisions will also continue to be of interest to investors. The Nifty finished Friday at 23,398.10, down 79.70 points or 0.34%, while the Sensex slipped 120.83 points, or 0.16%, to 74,781.76.

The Nifty hit a three-month low during the week. Nifty Bank extended its decline to a third consecutive week, while weakness also spread to midcap and small-cap stocks. Foreign Portfolio Investors poured ₹16,621 crore into Indian equities during the first half of August, extending inflows to ₹20,200 crore in July. Realty sector stocks were among the biggest laggards, while healthcare and pharmaceutical shares demonstrated relative strength.

Brent crude settled at 104.61 dollars per barrel after briefly reaching 110 dollars, further heightening concerns over inflation, corporate margins, and India's import expenses. As crude remains elevated and the Fed decision looms, global cues are likely to dictate market direction during the abbreviated trading week.