Indian Stock Market: Key Triggers for the Week Ahead
Market Watch: Inflation Data, US Tariffs, and FII Flow to Drive Indian Stock Market
The Indian stock market is poised for a significant week ahead, with several key triggers that will dictate market direction. After a consolidating for three consecutive weeks, the market snapped a two-week losing streak, driven by favourable domestic cues.
Key Triggers for the Indian Stock Market
Several factors will influence the market in the coming week, including:
- India’s retail inflation data
- Global tariff announcements, particularly from the US
- Foreign capital flow, especially from Foreign Institutional Investors (FIIs)
- Macroeconomic data, such as the Index of Industrial Production (IIP)
- Global market cues, including trade negotiations and US bond yields
Impact of RBI’s Monetary Policy
The Reserve Bank of India’s (RBI) recent monetary policy decision had a significant impact on the market. The RBI cut the repo rate by 50 basis points to 5.50 per cent and reduced the Cash Reserve Ratio (CRR) by 100 basis points to three per cent. This move is expected to lower the cost of funding for banks and spur credit growth.
Inflation Data and Market Expectations
Market participants will closely track high-frequency indicators such as the consumer price index (CPI) inflation data and the IIP to gauge demand trends and the central bank’s next steps. The progress of the monsoon and sowing patterns will also be monitored due to their implications for rural consumption.
IPO Action and FII Activity
The primary market will witness more action, with some new initial public offerings (IPOs) and listings slated across the mainboard and small and medium enterprises (SME) segments. FIIs remained net sellers, offloading ₹3,565 crore in equities, but strong domestic institutional flows offset the pressure.
Global Cues and Market Outlook
Developments in trade negotiations and movements in US bond yields will continue to influence investor sentiment. Global uncertainties and tariff-related risks could keep markets on edge and add to market volatility. Market analysts expect a mildly positive bias due to strong US job data and expectations of easing US-China trade tensions.
Technical View and Market Strategy
From a technical perspective, Nifty50 has approached the upper band of its prevailing consolidation range of 24,500–25,100. A decisive breakout above 25,200 would mark the beginning of a fresh uptrend. Investors are advised to remain selective and focus on fundamentally strong stocks in sectors such as banking, auto, and real estate.
