FII selling and weak earnings to weigh on market sentiment next week: Experts

Mumbai (Maharashtra) [India], October 27 : After the Indian stock markets extended their loss for the fourth consecutive week, dropping over 2.5 per cent, the two primery concerns, the foreign institutional investors (FIIs) selling and weak earnings are expected to continue influencing sentiment into the coming week, as per the market experts.
The investors will be closely monitoring, the quarterly results of key players like Bharti Airtel, Cipla, Dabur, and L&T are set to announce their earnings.
The market watchers say that the upcoming expiry of October derivatives contracts is also expected to increase volatility, and with the new month, auto sales data will provide further cues.
"Despite the lack of alignment with global markets, the U.S. market performance will remain relevant, particularly with continued speculation on rate cuts and the upcoming presidential election. Over the past week, the Dow Jones Industrial Average (DJIA) declined by over 2.5%, while the S&P 500 and Nasdaq Composite showed mixed trends, ending flat to marginally lower," said Ajit Mishra - SVP, Research, Religare Broking Ltd.
The trading session which lasts on Friday, the market sentiment remained negative throughout the week, primarily driven by persistent foreign fund outflows and underwhelming earnings reports.
As a result, both benchmark indices, the Nifty and Sensex, closed near their weekly lows at 24,180.80 and 79,402.29, respectively.
S&P Global Market Intelligence in its forcast said that the coming week is crowded with economic data in the United States and eurozone that will impact the market already jugging the earnings season and speculation around the US Presidential election.
Optimistic on the markets, Vinod Nair, Head of Research, Geojit Financial Services said, "Due to the regressive selling, the domestic market is expected to reach the oversold territory. We can expect a tactical bounce in the near-term. The resilience of recent manufacturing data suggests the plausibility of an economic recovery in H2FY25, which should encourage investors to accumulate quality stocks."
In last trading week, sectoral indices such as realty, metals, and auto experienced notable declines, although IT managed to hold steady.
Experts say that the quarter results were impacted due to a tepid demand environment and margin pressure, which dragged FMCG, metal, auto, and realty the most. While IT remained relatively flat and contributed less to the overall losses in expectation of a pickup in BFSI spending and a favourable outlook in US spending.
"We expect the consolidation to continue in the short term; a reversal in trend will depend on a slowdown in FIIs selling intensity and the outcome of the US presidential election," Nair added.