India stock outlook: FPI trends, Fed policy, and Pakistan tensions to guide markets sentiment

NEW DELHI: Indian stock markets will closely monitor the movement of foreign portfolio investments (FPI), which have recently turned net buyers, along with developments on the India-US bilateral trade deal front, and the Q4 earnings of key listed companies for fresh cues in the coming week.
Globally, the outcome of the US Central Bank monetary policy meeting would also be closely watched.

This week, the Sensex and Nifty indices registered their longest weekly winning streak of 2025, led by steady foreign inflows and increasing optimism over a potential India-US trade deal.

Cumulatively, Sensex soared over 1,100 points or 1.5 per cent in the holiday-truncated week. The stock exchanges were closed on May 1 for Maharashtra Day.

Reliance Industries’ strong Q4 performance and its becoming the first Indian company to cross Rs 10 lakh crore in total equity also supported the broader stock market indices. Reliance shares jumped about 7 per cent on a cumulative basis in the week that ended on Friday.

Another positive factor was that foreign portfolio investors turned net buyers in Indian markets after three months, though the pace of buying is still picking up.

“The week is expected to be pivotal for global financial markets, with high-impact economic events from the United States and China. In the US, all eyes will be on the FOMC Rate Decision scheduled for May 7, as markets closely monitor any changes in the Federal Reserve’s interest rate policy amid ongoing inflationary pressures and mixed economic signals,” said Bajaj Broking Research in a note.

“China will release a batch of critical data, beginning with Trade Balance, Exports YoY, and Imports YoY on May 9, which will offer valuable insight into global demand trends and the state of international trade. The week will wrap up with China’s CPI and PPI data on May 10, providing a comprehensive view of inflation at both consumer and producer levels. Together, these indicators will offer a clearer picture of global economic momentum and could significantly sway investor sentiment and central bank strategies,” the note added.

Indian stock indices had seen upward movement since Trump’s decision to pause the reciprocal tariffs on dozens of countries, including India, for 90 days. The tariffs had initially set off a sell-off in equities globally, and India was no exception.

Emanating geopolitical tensions, following the terrorist attack in Pahalgam, had weighed on investor sentiment to an extent recently. Developments regarding geopolitical tensions with Pakistan following the April 22 terrorist attack will remain on the investors’ radar. (ANI)