US And Global Market Cues: 5 Factors For Indian Investors To Watch On Monday

Indian equities enter Monday trading after extending their weekly losing streak to eight weeks, with global factors continuing to weigh on sentiment. Rising crude oil prices, elevated US bond yields and sustained foreign selling remain key concerns for Dalal Street.

The global picture turned somewhat mixed at the end of last week. US stocks gained after weaker employment data reduced expectations of another immediate rate hike, although bond markets remained under pressure.

What Did The Latest US Jobs Data Signal?

The US economy added just 29,000 non-farm jobs in September, sharply below the 90,000 expected. The unemployment rate rose to 4.2% from 4.1% in August, while average hourly earnings increased 0.1% month-on-month, taking annual wage growth down to 3.0% from 3.1%.

The data has reduced expectations of an October rate hike. Markets were pricing roughly a below-20% chance of an increase after the report, compared with around 60% at the start of the week. This also led to an increase in the futures of the S&P 500 and Nasdaq composite indices.

Where Are US Treasury Yields Headed?

The 10-year US Treasury yield has climbed to 5.34%, its highest level since 2002. Elevated US yields can make dollar assets more attractive relative to emerging-market equities and add pressure on the rupee.

The yield trajectory will therefore remain an important global-market cue for Indian equities, particularly after the recent rise in borrowing costs globally.

How Could Oil And Geopolitics Affect Indian Markets?

Crude remains closely tied to developments in the Middle East. While oil prices were subdued during the week, the risk of further supply disruptions remains.

Goldman Sachs has outlined a scenario in which oil could reach $120 a barrel if attacks on vessels in the Middle East intensify. It expects prices to move towards $80 if exports return to normal.

How Much Pressure Is Foreign Selling Creating?

Foreign Institutional Investors (FIIs) have sold ₹43,687 crore of Indian equities over six trading sessions, with selling accelerating in the latest three sessions. Their index futures long-short ratio has also fallen to 8.01%.

September alone saw ₹44,010 crore of foreign selling, while Domestic Institutional Investors (DIIs) invested ₹76,030 crore.

Why Is The Rupee Also In Focus?

The Indian rupee has fallen to a two-month low as higher oil prices, elevated US yields and foreign portfolio outflows add pressure on the currency.

A weaker rupee can raise the cost of imported commodities and other overseas inputs, making the currency's movement another important cue for Monday's trading session.

Indian markets face a mix of external pressures, although softer US hiring could ease immediate rate-hike concerns.

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