Indian equity markets are gearing up for a week packed with significant events that are likely to set the tone for near-term direction. Investors are poised to closely monitor the commencement of the December quarter earnings season, crucial domestic and global inflation figures, and unfolding global macroeconomic and geopolitical developments.
Domestic Triggers: Earnings and Inflation in Focus
The spotlight will firmly be on corporate performance as the third-quarter earnings season kicks off. Several index heavyweight companies across sectors like information technology, banking, financial services, and energy are scheduled to announce their results. This includes industry bellwethers such as Tata Consultancy Services (TCS), Infosys, HCL Technologies, Jio Financial Services, Reliance Industries, and Tech Mahindra.
Analysts emphasize that the earnings commentary and management guidance from these leaders will be critical in shaping market sentiment and determining sectoral movements. "This week marks the start of the earnings season alongside a busy macroeconomic calendar. Investors will closely track India’s CPI inflation, WPI inflation," said Ajit Mishra, SVP – Research at Religare Broking Ltd.
On the data front, the release of India's Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation numbers for December will be scrutinized for clues on the domestic price trajectory and its implications for monetary policy.
Global Cues and External Variables
International developments are expected to remain firmly on the radar. Markets will keenly watch the US Supreme Court verdict on the legality of Trump-era tariffs, which analysts say could emerge as a key sentiment driver. Ongoing geopolitical tensions will also be monitored for their impact on risk appetite.
Furthermore, key economic data from the United States, including core CPI, retail sales, and home sales numbers, will influence expectations regarding the timing of interest rate cuts by the Federal Reserve. "These data points will influence expectations around the pace and timing of monetary policy easing by major central banks," noted Ponmudi R, CEO of Enrich Money. Such expectations have direct implications for global capital flows and currency movements.
Analysts also highlighted that currency movement and crude oil prices will be other important variables during the week, given their influence on foreign fund flows and domestic inflation expectations.
Market Context and Outlook
The domestic equity market ended the previous week on a bearish note, weighed down by renewed US tariff threats, geopolitical tensions, and persistent foreign fund outflows. The BSE Sensex declined 2,185.77 points (2.54%), while the NSE Nifty slipped 645.25 points (2.45%) over the week.
As the new week begins, the confluence of domestic earnings, inflation data, and global cues will be pivotal. "Q3 earnings will take centre stage, particularly for IT stocks, as major players begin announcing results," said Vikram Kasat, Head – Advisory at PL Capital. He added that any commentary from the US on trade policy and deal negotiations will also be keenly watched.
With markets at a critical juncture, the outcomes of these events will likely determine whether the recent corrective phase deepens or if bulls can stage a recovery based on positive corporate surprises and supportive data.
