With the India-US trade tensions on a high, it will most likely weigh heavy on investors’ minds, driving stock markets this week.
Meanwhile, global market trends, inflation data, more corporate earnings in the first quarter, and trading activities of foreign investors will also influence markets, said analysts on Sunday.
Key factors to watch this week are trade negotiations, macroeconomic data, earnings and FII flows, affirmed Santosh Meena, Head of Research at Swastika Investmart, adding that any updates or posturing from India and the US will remain a primary market driver.
"India, the US, and China will release key numbers, with US inflation data (12th August) being especially crucial in the backdrop of higher tariffs. India’s inflation numbers will also be released on the same day," Meena noted.
Ajit Mishra, SVP, Research, at Religare Broking Ltd, agreed that all eyes would be on domestic CPI and WPI inflation data.
“Developments in the US-India trade relations will also remain in focus amid ongoing discussions over a trade agreement. The earnings season is nearing its end, with key results due from Ashok Leyland, ONGC, IOC, Hindalco Industries, BPCL and others, which could drive stock-specific action," he added.
Also Read: Markets insight: Factors driving investor sentiment this week
Extending its losing streak for the sixth consecutive week, the BSE benchmark dropped 742.12 points or 0.92 per cent, and the Nifty declined 202.05 points or 0.82 per cent.
Foreign investors have pulled out nearly ₹18,000 crore from Indian equities so far this month.
"Looking ahead, markets will enter the final leg of the Q1 earnings season, which is expected to drive stock-specific moves. Overall, we expect equities to remain in consolidation mode until there is clarity on the tariff front. In this volatile environment, investors may focus on domestic-oriented themes, while traders are advised to keep positions light," observed Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
Equity markets would remain closed on Friday for Independence Day.
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