Indian stock markets are bracing for a volatile week ahead, with uncertainty over potential US tariffs emerging as a major wildcard. Investors are closely watching global trade tensions that could ripple through to domestic equities. Beyond tariffs, a cocktail of domestic and international factors will dictate the Sensex and Nifty’s trajectory from Monday.
First on the list is the impending RBI monetary policy announcement. Markets anticipate a status quo on interest rates amid persistent inflation pressures, but any hawkish signals could trigger sell-offs. Recent data shows CPI inflation hovering above the Reserve Bank’s comfort zone, prompting caution among policymakers.
Corporate earnings season kicks into high gear next week, with heavyweights like HDFC Bank, Reliance Industries, and TCS set to unveil quarterly results. Strong performances could bolster investor confidence, while misses might exacerbate downside risks. Analysts predict mixed outcomes, with IT and banking sectors under particular scrutiny.
Global cues remain pivotal. The US Federal Reserve’s latest minutes hinted at fewer rate cuts in 2024, strengthening the dollar and pressuring emerging markets like India. Crude oil prices, currently fluctuating around $80 per barrel, add another layer of uncertainty, especially for energy-sensitive stocks.
Domestically, FII inflows have turned positive after weeks of outflows, providing some cushion. However, rising US bond yields could reverse this trend swiftly. Government’s capital expenditure push in infrastructure continues to support select sectors like construction and metals.
Technical indicators suggest the Nifty is testing key support at 24,000. A decisive move above 24,500 could signal bullish momentum, while a breakdown might lead to 23,500. Options data reveals high put activity at lower strikes, indicating hedged bets.
Sector-wise, banking and IT may face headwinds from global slowdown fears, whereas FMCG and pharma could offer defensive plays. Investors should monitor US-China trade rhetoric closely, as escalation could dampen risk appetite worldwide.
In summary, while domestic resilience offers hope, external shocks like US tariffs loom large. Prudent positioning and selective buying on dips will be the winning strategy for the week ahead. Stay tuned as these factors unfold.