Fed Decision, Crude Oil Prices to Drive Indian Equities Next Week

The Indian stock market is expected to be driven by several key factors next week, including the US Federal Reserve's policy decision and global monetary cues. The Nifty ended last week at 23,398.10, down 0.34% from its previous value, while the Sensex closed at 74,781.76, declining 0.16%. The Nifty touched a three-month low as selling pressure persisted across the broader market.

The US Federal Reserve's 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' market reaction could depend heavily on the Fed's communication and forward guidance rather than 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.