Global uncertainty, key economic data to keep Indian markets volatile, say analysts

MUMBAI: Indian stock markets are likely to remain volatile in the near term amid global uncertainties and a heavy flow of economic and earnings data, according to the market analysts.

The analysts have stated that the upcoming week will be crucial, with several key macroeconomic data releases scheduled.

On the domestic front, focus will be on India’s CPI inflation and WPI inflation data, which will provide insights into the inflation trajectory and policy outlook.

“Markets are likely to remain volatile in the near term amid global uncertainties and a heavy flow of economic and earnings data,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

“Looking ahead, the 25,300-25,250 zone is expected to serve as a crucial support area for Nifty,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.

According to Mishra, while short-term sentiment could stay cautious due to persistent FII outflows and uneven earnings, improving domestic macro indicators and steady corporate performance may provide underlying support.

On the broader markets, the experts said that they are expected to witness a mixed trend, with larger midcaps likely to outperform while smallcaps may continue to face selling pressure.

On Friday, markets ended lower for the second consecutive week, weighed down by persistent foreign fund outflows, mixed corporate earnings, and cautious global cues.

Despite optimism surrounding progress in India-US trade talks, sentiment remained subdued through the holiday-shortened week.

Both benchmark indices declined by over 0.80 per cent, with the Sensex closing at 83,216.28 and the Nifty settling at 25,492.30.

The week’s market tone was shaped by a combination of domestic developments and global trends.

On the domestic front, improved GST collections, a surge in retail sales during the festive season, and encouraging updates on the India-US trade negotiations provided some support. However, mixed quarterly earnings, a sharp decline in India’s exports to the US, and continued FII selling kept overall sentiment under pressure.

Globally, renewed concerns over the valuation of AI-related stocks triggered profit-taking across major markets, further weighing on risk appetite.
Sectoral performance remained largely negative, with weakness in Metal, IT, and FMCG dragging the benchmarks lower. In contrast, selective strength was observed in Financials and Banking, which provided partial support.

Among the broader indices, the Midcap index ended flat, while the Smallcap index declined 1.7 per cent, indicating profit booking in the broader space. (ANI)