Fed Decision, Crude Oil, Global Cues Set to Drive Indian Markets

The upcoming week is expected to be driven by several key factors including the US Federal Reserve's policy decision, crude oil prices, and global monetary policy cues. The Indian markets will remain closed on Monday for Ganesh Chaturthi, allowing investors to react to these developments from Tuesday onwards.

The Nifty ended the previous week at 23,398.10, declining by 79.70 points or 0.34%, while the Sensex closed at 74,781.76, down 120.83 points or 0.16%. The Nifty touched a three-month low during the week due to persistent selling pressure across the broader market.

The US Federal Reserve's interest rate decision and FOMC Economic Projections will be the biggest global trigger for markets during the week. Markets are pricing in a high probability of a 25-basis-point rate hike following the latest inflation data, with US headline CPI increasing 0.4% month-on-month and remaining at 3.4% annually.

Indian equities may react heavily to the Fed's communication and forward guidance rather than just the rate decision alone. An unchanged policy rate or a hike accompanied by balanced guidance could support a relief rally if investors interpret the outcome as less restrictive than currently feared.