Week Ahead: Key Triggers That Will Drive Indian Stock Market This Week
The Indian stock market extended its recovery for the second consecutive week, posting nearly one percent gains amid a consolidation phase. Market momentum was tempered by profit-booking following heightened geopolitical tensions between India and Pakistan after the Pahalgam terrorist attack.
The Nifty 50 and BSE Sensex advanced 0.80% for the week, closing at 24,039.35 and 79,212.53 respectively. Market volatility increased with the India VIX rising by 11%, partially reversing the previous week's 23% decline.
Major Market Drivers This Week
As we enter the holiday-shortened final week of April, several critical factors will influence market direction. Investors will be closely monitoring these key triggers:
Q4 Earnings Season
Several prominent companies are scheduled to release their March quarter results for FY24-25, including BPCL, IOC, Kotak Mahindra Bank, SBI, Bajaj Finance, TVS Motor, and UltraTech Cement. The current earnings season has started on a subdued note, with market experts expecting performance to improve from Q1 FY26 onwards.
Auto Sales Data
With the beginning of a new month on May 1st, monthly auto sales figures will be a focal point for investors assessing sector performance and consumer demand trends.
Macroeconomic Indicators
Market participants will closely track the Index of Industrial Production (IIP) data and the final HSBC Manufacturing PMI figures to gauge economic health.
India-Pakistan Tensions
The escalating geopolitical situation following the terror attack in Kashmir that claimed 26 lives has introduced caution among investors. Historically, the Indian market has demonstrated resilience during geopolitical disruptions, but sentiment may remain cautious in the near term.
Foreign Investment Flows
Foreign portfolio investors (FPIs) have turned aggressive net buyers, injecting ₹17,800 crore into the cash segment during the past week, while domestic institutional investors (DIIs) added around ₹1,132 crore. This shift in FII strategy is particularly notable given the current geopolitical tensions.
Primary Market Activity
The upcoming week will see significant action in the primary market:
- Ather Energy IPO - marking the first mainboard IPO of the new fiscal year 2025-26
- Four new issues opening for bidding in the SME segment
- Tankup Engineers shares listing on either BSE SME or NSE SME
Global Factors
Global market stability has been supported by ongoing discussions between the United States and its trading partners regarding new trade agreements, which have helped ease concerns about tariff impacts on global commerce.
Two strong factors currently driving FII flows into India include:
- The reversal of the sustained rise in the US dollar, with the dollar index falling from a peak of 111 in mid-January to around 99 now
- Expected decline in US growth this year contrasting with India's resilient economy, which is projected to maintain growth above 6%
The positive market momentum has been supported by progress in India-US bilateral trade agreements and easing concerns over US-China trade disputes, both contributing to improved investor sentiment.
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