In the background of US-China meetings in Geneva to discuss their near-embargo on trade, Indian stock markets have their eyes peeled on the volatile domestic situation to decide market trends. Having emerged from a geopolitical upheaval that is still on tenterhooks after the India-Pakistan ceasefire announcement, the new week promises to be an eye-opener when it comes to deciphering crucial economic data and companies releasing their quarterly results.
Market experts predict that the week of May 13 to 16, 2025, will be discerning for the equity index because of a slate of crucial economic data releases across India, the United States, and China, which will guide investor sentiment and central bank expectations. “The upcoming week will be pivotal, marked by several key domestic triggers. Geopolitical developments, particularly the on-going tensions with Pakistan, will continue to remain in focus,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
On the macroeconomic front, investors will closely monitor the release of key data points including the Consumer Price Index (CPI), Wholesale Price Index (WPI), and trade figures for exports and imports, he added. Additionally, the corporate earnings season will gather pace, with several major companies including PVR INOX, Tata Steel, Bharti Airtel, Cipla, GAIL, Hero MotoCorp, Tata Motors, Lupin, Godrej Industries, and BHEL scheduled to announce their quarterly results, Mishra said.
“In India, inflation will be in focus with the release of CPI YoY data on May 13, providing clarity on consumer price trends and their implications for the Reserve Bank of India’s monetary policy. Additionally, Exports YoY data on May 15 will shed light on the health of India’s external trade amid global uncertainties,” noted the team of Bajaj Broking Research.
Indian stock markets experienced a sharp downturn last week, largely due to escalating geopolitical tensions between India and Pakistan following missile and drone attacks. This resulted in a risk-off sentiment, leading to a decline in the Nifty 50 (down 1.39%) and BSE Sensex (down 1.30%). The sell-off was particularly pronounced in sectors like Realty, Banking, and Pharma that fell between 2 per cent and 6 percent; while Auto and Media showed more resilience.
The sell-off had intensified on the final trading day of the week as fears of further escalation began to surmount in the country when the Indian Army reported multiple overnight drone and munition attacks by Pakistani forces. Meanwhile, U.S. markets also traded mostly in the red, as the Federal Reserve kept interest rates unchanged – which was a widely expected move – but flagged growing uncertainty around the economic outlook, adding to global investor caution. The broader markets followed suit, as mid- and small-cap indices registered losses ranging from 0.90 per cent to 2.17 per cent.
Coming up, as uncertainty looms large over the recently announced ceasefire between India and Pakistan after it has significantly contributed to market volatility as evidenced by the spike in the India VIX, new developments are expected to cushion the downslide.
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