Equity markets will closely follow the outcome of the US Federal Reserve policy meeting this week amid heightened expectations of an interest rate cut, along with wholesale price inflation data, analysts said.Any further developments on the US–India trade front will also be a critical driver of trends, as per news agency PTI.“Looking ahead, the key global event this week will be the US FOMC (Federal Open Market Committee) meeting outcome on September 17. Markets are widely factoring in a minimum 25 bps rate cut, given signs of a slowdown in the US job market,” said Santosh Meena, head of research at Swastika Investmart, as per PTI. He added that on the domestic front, movement in US–India trade discussions and foreign institutional investor (FII) flows would play a pivotal role in sustaining market momentum.Last week, the BSE benchmark jumped 1,193.94 points or 1.47 per cent, and the NSE Nifty climbed 373 points or 1.50 per cent. The Nifty registered its eighth straight day of gains on Friday, while the Sensex advanced for the fifth day in a row.“Global sentiment remains the key driver, with optimism across US and Asian markets supported by rising expectations of a Federal Reserve rate cut, fuelling risk appetite,” Ponmudi R, CEO of Enrich Money, said, as per PTI.Trading activity of foreign investors, the rupee-dollar trend and crude oil prices will also be crucial in guiding market direction, analysts noted.Siddhartha Khemka, head of research – wealth management, Motilal Oswal Financial Services Ltd, said the domestic market is expected to extend its gradual up-move this week. “Indian equity market is likely to extend its gradual up-move this week, supported by optimism around the GST-led consumption growth, expectations of a US Fed rate cut and improving sentiment around US–India trade talks,” he added.The Sensex had rallied 355.97 points or 0.44 per cent on Friday to close at 81,904.70, while the Nifty surged 108.50 points or 0.43 per cent to 25,114. The defence sector outperformed last week on reports that procurement authorities began negotiations for six next-generation submarines, while IT shares saw a boost from Infosys’ Rs 18,000 crore buyback plan.
