Market watch: Investors eye tariff Talks, economic indicators, forex decline, earnings

MUMBAI: Participants in the Indian stock markets will closely monitor ongoing tariff-related discussions, high-frequency indicators from both the US and India, two consecutive declines in foreign exchange reserves, and the earnings of companies.

According to market analysts, the first trading day of the market will be crucial, as investors will react to the first-quarter results of heavyweights such as Reliance Industries, HDFC Bank, and ICICI Bank.

“Going ahead, Monday’s trading session will be crucial for the index as heavyweights like Reliance Industries, HDFC Bank, and ICICI Bank are set to announce their Q1 results over the weekend. The reaction to these earnings could provide near-term direction and either amplify the current trend or spark a reversal,” Sudeep Shah, Head – Technical and Derivative Research, SBI Securities.

Shah added that one of the key developments to watch is the ongoing tariff-related discussions between India and the US.

“Any escalation or resolution in these talks could have a direct impact on trade dynamics, especially in sectors like pharmaceuticals, IT services, and industrial goods,” Shah added.

In its weekly outlook note, Bajaj Broking Research stated that the upcoming week will bring a mix of high-frequency indicators from both the US and India, offering insights into manufacturing activity, housing health, and labour market strength.

“In the US, attention will turn to Existing Home Sales (June) on July 23, which could highlight the resilience (or weakness) in the housing market amidst sticky mortgage rates. A day later, markets will keenly watch the Initial Jobless Claims, a critical labour market pulse, alongside the S&P Global Manufacturing PMI (Preliminary) for July. Any softening in jobless claims or stabilisation in PMI could boost investor sentiment, particularly if recession concerns re-emerge,” the Bajaj Broking Research added in the note.

On the Indian front, according to the note, the key data point will be the S&P Global Manufacturing PMI (Preliminary) for July, due on July 24.

The manufacturing sector has shown steady expansion in recent months, and investors will look for signs of sustained momentum.

“Additionally, FX Reserves data on July 25 will be tracked to assess the RBI’s intervention stance and the strength of India’s external buffers amidst global currency fluctuations,” Bajaj Broking’s note added.

On Friday, Indian equity benchmarks ended in the negative zone after trading lower as market participants reacted to the first quarter (Q1FY26) earnings of the finance and IT sectors, despite positive global cues.

On the sectoral front, except for metal and media, all other indices traded in the red with pharma, PSU banks, FMCG, capital goods, consumer durables, and telecom down 0.5-1 per cent.

The banking benchmark index Bank Nifty also extended its losing streak, ending in the red for the third consecutive week.

Reacting to the market’s movement, Vinod Nair, Head of Research, Geojit Investments Limited, said elevated valuations in large-cap stocks, coupled with significant net short positions held by Foreign Institutional Investors (FIIs), have contributed to a cautious sentiment among investors.

Domestic Institutional Investors (DIIs) were net buyers and Foreign Institutional Investors (FIIs) were net sellers during the week. (ANI)