- Indian stock markets expected to remain volatile due to earnings, inflation, and crude oil prices
- September CPI and WPI inflation data are key domestic indicators influencing market sentiment
- IT stocks, including HCL Technologies and Wipro, will remain in focus during earnings season
Indian stock markets are likely to remain volatile this week as investors track quarterly earnings from major companies, domestic inflation figures, global economic indicators and movements in crude oil prices, according to analysts.
Foreign-institutional-investor activity, rupee movements, US Treasury yields and geopolitical developments are also expected to influence market sentiment.
The September Consumer Price Index and Wholesale Price Index inflation data will be among the key domestic indicators. "September CPI inflation will be the first major domestic test this week. A stronger-than-expected reading could revive concerns over further RBI tightening, putting rate-sensitive sectors such as banking, automobiles and real estate under pressure while raising the risk of a broader drag on consumer demand," HST Wealth CEO Hariselvan Radhakrishnan said.
Conversely, softer inflation could ease concerns about interest rates, although elevated crude oil prices may limit any improvement in investor sentiment. Brent crude trading above $100 per barrel remains a significant risk for Indian equities, given the country's dependence on imported oil. Persistent energy price increases could raise inflation, transportation costs and pressure corporate margins, as per Radhakrishnan.
Wholesale inflation data will provide further insight into how energy and logistics costs are affecting producers. Meanwhile, US inflation and employment data, along with retail sales figures, could influence the dollar and Treasury yields. European inflation and UK economic growth figures will also be monitored.
IT Stocks to Remain in Spotlight
The September-quarter earnings season is expected to drive stock-specific movements, with HCL Technologies, Wipro and Tech Mahindra among the major information technology companies scheduled to announce results.
IT stocks rebounded sharply on Friday after Tata Consultancy Services reported better-than-expected September-quarter earnings, with its shares rising more than 4 per cent. The sustainability of the recovery will depend on results from other companies and their outlook for the coming quarters.
The sector has also been assessing the implications of US restrictions affecting an employment-based green card programme. TCS said the action was unlikely to affect its workforce strategy or customer engagements, citing limited applications under the programme and an emphasis on local hiring.
Other companies scheduled to announce results include BHEL, Canara Bank, HDB Financial Services, HDFC Asset Management Company and Nestle.
READ: Crude Oil Futures Brace For Volatility Amid Geopolitical Uncertainties, Say Analysts
Markets Show Signs of Stabilisation
After eight consecutive weeks of declines, the Nifty 50 gained 0.43 per cent last week, while the BSE Sensex advanced 0.78 per cent. The recovery suggests some stabilisation, although sustained foreign investor selling and geopolitical uncertainty could limit further gains, according to Siddhartha Khemka. head of research, Motilal Oswal Financial Services Ltd.
Enrich Money CEO Ponmudi R suggested: "TCS's results helped trigger a rebound across IT stocks, supporting the broader indices on Friday. Crude oil remains the biggest macroeconomic risk."
Overall, earnings announcements, inflation readings, foreign fund flows and crude oil movements are likely to determine the direction of Indian equities in the coming sessions.
(With the PTI inputs)
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