Fed's Rate Decision to Watch as Dalal Street Braces for Market Volatility

Market Watch: Key Triggers Ahead

With only four trading sessions left for Dalal Street this week. Investors will be glued to screens watching the US Federal Reserve's interest rate decision, domestic inflation data, crude oil prices and developments in the Middle East. Markets will close on Monday for Ganesh Chaturthi. Leaving the September 15–16 Federal Open Market Committee (FOMC) meeting as the key event when trading resumes.

Analysts say the Fed's rate decision and commentary on interest rates will be closely watched, with Hariselvan Radhakrishnan stating "The immediate focus will be on US inflation and the Federal Reserve's policy decision." The September 11 inflation report showed headline CPI rising 0.4 per cent month-on-month and holding at 3.4 per cent annually.

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Global Risks Loom Large

Developments in the US-Iran conflict and movement in Brent crude will also remain critical market drivers. According to Ajit Mishra of Religare Broking. "The US Federal Reserve's monetary policy decision and its commentary on the future path of interest rates would dominate the week." Radhakrishnan warns that a renewed rise in crude oil could add to inflationary pressures, widen the import bill, weigh on the rupee and squeeze corporate margins.

Domestic data, including WPI inflation and trade figures, will provide additional clues on how much of that pressure is filtering into the economy.

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Market Outlook: A Sharp Sell-Off

The market heads into the week after a sharp sell-off, with BSE benchmark Sensex losing 1,733.67 points, or 2.26 per cent, last week. Meanwhile, NSE Nifty fell 499.6 points, or 2 per cent. The Nifty-50 has now extended its weekly losing streak to five consecutive weeks.

Markets remained under significant pressure as escalating tensions in the Middle East triggered a sharp rise in crude oil prices and intensified concerns over inflation. Global interest rates and economic growth. Investors will be watching for cues on the market's next move, with Ponmudi R of CEO stating "Global macroeconomic and geopolitical risks are likely to keep Indian equities on edge in the week ahead."