Indian Stock Markets: Q2 Earnings, FPI Selling, and Global Trends to Shape the Week Ahead

In the coming week, Indian stock markets will focus on several key factors, including the second-quarter earnings reports, Foreign Institutional Investor (FII) activities, and global market trends, analysts say. Developments such as the winter session of Parliament and political outcomes in Maharashtra will also be closely watched.

Key Market Drivers

1. Global Trends:
   Traders will monitor global market movements, including the impact of Trump’s re-election in the U.S. His pro-business policies and corporate tax cuts have boosted equity markets there, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
2. Sector Performances:
   The performance of banking and IT stocks will play a major role in shaping the market’s direction, noted Ajit Mishra, Senior VP, Research, Religare Broking Ltd.
3. Domestic Politics:
   Investors are paying attention to the Maharashtra election results for signs of political stability, said Manish Goel, Founder and MD, Equentis. The outcome could influence both state governance and market sentiment.

Market Trends Last Week

The markets resumed their downward trend after a brief pause, falling over 2.5% during the week.

• Indices: The Nifty ended at 23,532.70, and the Sensex closed at 77,580.30, both near their weekly lows.
• Sector Impact: Most sectors saw losses, with metals, FMCG, and auto stocks hit the hardest. However, the IT sector bucked the trend, gaining nearly 1%.
• Broader Market: Midcap and smallcap indices fell sharply, losing over 4% each.

Challenges Ahead

Concerns over rising inflation (CPI) and weaker-than-expected corporate earnings weighed heavily on investor sentiment. Analysts caution that markets may stay volatile as participants track earnings reports, global developments, and FII selling patterns.