Global cues certainly have an impact on the Indian markets and there is no running away from that. World markets are very integrated and India cannot be immune from these effects. Here are two important global trends that are influencing Sensex and Nifty.

The MSCI revamp is a big trigger for Indian markets. The MSCI revamp came as a blessing in disguise for the Indian stock markets. The new weightage for India would mean an additional 100 bps weightage in the emerging market sweepstakes. That would imply another $2.5 billion in inflows into India from ETFs, index funds and other passive players. If you add the anticipatory buying by the FPIs, the impact is likely to be magnified.

But above all, there is a clear shift among FPIs towards risk-on. Global cues are actually turning risk-on. Two things have changed in the last two weeks. The US and China have made a good start to the trade deal. Global investors and traders are likely to heave a sigh of relief as event risk comes down. The UK election outcome also means greater certainty in its journey towards BREXIT. The net result is a boost for risk-on emerging markets like India. That is a major market driver