Can Sensex, Nifty snap 2-day fall? 7 factors that could decide market mood this week

The Indian stock market closed the previous week on a negative note, with benchmark indices Sensex and Nifty falling over one percent, primarily due to a significant selloff in IT stocks. Investor sentiment is being affected by fears of disruptions from artificial intelligence, alongside stronger-than-expected job growth in the U.S., dampening hopes for an interest rate cut by the Federal Reserve. However, the recent session saw a rebound in shares of IT giants Infosys and Wipro, with gains of 3% and 4% respectively, as investors engaged in bargain hunting following a sharp decline in their American Depositary Receipts (ADRs). Analysts from JPMorgan reassured investors, branding these IT firms as essential to the tech sector and suggesting they present 'deep value' buying opportunities. Additionally, U.S. inflation data indicating a slight dip in the Consumer Price Index has raised expectations for potential monetary easing by the Federal Reserve, which could further impact global markets. Market experts suggest that foreign institutional investors (FIIs) may return as buyers once volatility in the IT sector subsides, especially given India's relatively stable economic outlook amidst AI-related concerns. As these factors unfold, they will play a critical role in determining market sentiment in the coming week.