Global cues, inflation trends likely to drive domestic equity market: Analysts

Domestic equity investors are likely to keep a close watch on global cues, especially the fallout of the US-based Silicon Valley Bank failure, inflation trends and foreign fund flows in the coming week after days of volatile trading sessions.After the holiday-shortened trading sessions this week that saw the benchmark Sensex declining more than 1 per cent, analysts opined that investors will be waiting for the consumer price inflation data for February to be released on Monday.

"Poor global cues were major contributors to the weakness in the Indian equity markets, and they will continue to be significant next week," Santosh Meena, Head of Research at Swastika Investmart Ltd, said.

The failure of the Silicon Valley Bank, a key funding source for startups in the technology space, has sparked concerns regarding the overall health of the global financial system amid central banks raising interest rates to tackle inflation.

"The global market has fallen back into the grip of uncertainty following the US Federal Reserve chief's comment that signalled the possibility of a prolonged and faster rate hike, contradicting a dovish comment made by another Fed official last week," Vinod Nair, Head of Research at Geojit Financial Services, said.