Indian Markets May Consolidate Amid Global Economic Uncertainty

The global economic situation remains uncertain due to various factors such as Brent crude near $105 per barrel and multi-year highs in global bond yields, which are expected to keep sentiment measured.

According to recent data, India's Nifty 50 declined by 0.9% last week, while the Nifty Midcap 100 fell by 2.1% and the Nifty Smallcap 100 declined by 0.9%. On the other hand, Realty and Pharma sectors led gains with increases of 3% and 1.1%, respectively.

The global policy cycle has shifted towards tightening, with major central banks such as the US Federal Reserve raising interest rates to combat inflation concerns. This is expected to tighten domestic financial conditions in India ahead of the RBI's October 7 policy review, favoring companies with strong balance sheets and low refinancing dependence.