Holiday-Shortened Week Driven by US Fed Decision, Inflation Data, Crude Oil

The upcoming holiday-shortened week is expected to be driven by key market drivers, including the US Federal Reserve's monetary policy decision, domestic inflation data, and crude oil prices.

Ajit Mishra, SVP of Research at Religare Broking, says that globally, developments in the US-Iran conflict and movement in Brent crude will remain critical market drivers. The immediate focus will be on US inflation and the Federal Reserve's policy decision.

According to Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, the September 11 inflation report showed headline CPI rising 0.4% month-on-month and holding at 3.4% annually, while core inflation increased 0.3% from the previous month but eased to 2.4% year-on-year.

The September 15-16 FOMC meeting will be the week's principal global catalyst, Radhakrishnan says. For India, crude oil remains the most immediate external risk, and any renewed rise in crude could add to inflationary pressures, widen the import bill, weigh on the rupee, and squeeze corporate margins.

Last week, the BSE benchmark Sensex tumbled 1,733.67 points, or 2.26%, and the NSE Nifty declined 499.6 points, or 2%. Global macroeconomic and geopolitical risks are likely to keep Indian equities on edge in the week ahead.