Inflation data, trading activity of foreign investors, and global trends will dictate the sentiment in the stock market this week, following the recent US-India trade deal, analysts say. Besides, geopolitical developments and third-quarter profits will also guide market movement in the coming week.
“This week remains crucial due to several domestic and global triggers. In the domestic market, investors will closely follow the retail inflation data, due on February 12, and the foreign exchange reserves data, due on February 13.”
On Friday, both Sensex and Nifty closed higher, supported by selective buying in key stocks such as ITC, Kotak Mahindra Bank, and ICICI Bank. The Sensex rose 266 points, equating to 0.32 per cent, and settled at 83,580, while the Nifty 50 gained 51 points, or 0.20 per cent, ending the session at 25,693.70.
“Despite tensions between Iran and the US, the India-US trade deal helped the market end with healthy gains, as bullish momentum resurfaced with supportive global and domestic triggers outweighing initial budget-related concerns,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
Following the announcement of the India-US trade deal on Monday, an interim trade pact between the two nations was finalised on Friday evening.
Overall, the sentiment remains cautiously optimistic, with markets expected to stay event-driven in the near term, tracking global cues, capital flows, and ongoing geopolitical tensions in the Middle East.
Meanwhile, gold prices bounced back on Friday and were on track to post a weekly gain, supported by bargain buying, a mildly weak dollar, and persistent worries surrounding US-Iran negotiations in Oman, while silver also staged a recovery after slipping to a one-and-a-half-month low.
Although the rupee had further weakened to 90.70 by the close on February 6, the INR is likely to stabilise and gradually appreciate to below 90 per US dollar by the end of the first quarter.
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