As traders gear up for the trading week starting Monday, the shadow of US tariff policies hangs heavy over Dalal Street. President-elect Trump’s aggressive trade stance has sparked fears of renewed protectionism, potentially hitting Indian exports hard. But this isn’t the only story in town – several critical elements will shape market direction.
The Reserve Bank of India’s policy meeting tops the domestic agenda. With growth moderating slightly, will Governor Shaktikanta Das opt for a rate cut to spur activity? Consensus points to no change, but forward guidance will be dissected for clues on future easing.
Q2 earnings reports from blue-chip firms promise fireworks. Expect detailed breakdowns from ICICI Bank, Infosys, and Maruti Suzuki, among others. Consensus estimates project tepid revenue growth due to weak consumer spending, but cost controls might surprise positively.
Overseas, Fed Chair Jerome Powell’s comments and non-farm payroll data could sway sentiment. A hotter-than-expected US jobs report might delay rate cuts, boosting the dollar and sucking liquidity from emerging markets. Geopolitical tensions in the Middle East keep oil prices on edge.
FIIs have pumped in over ₹10,000 crore this month, reversing October’s exodus. Yet, vulnerability persists if US 10-year yields climb further. DIIs remain steadfast buyers, providing balance.
From a technical standpoint, Nifty’s RSI shows oversold conditions, hinting at a potential rebound. Key resistance lies at 24,300-24,400. Volatility index India VIX is elevated, signaling choppy waters ahead.
Defensive sectors like utilities and healthcare may outperform amid uncertainty, while cyclical plays like autos and realty could lag. Watch for tariff-related headlines from Washington – any concrete announcements could trigger sharp moves.
Market veterans advise against chasing momentum. Instead, focus on quality stocks with strong balance sheets. Next week’s action will test the resilience of India’s bull run, with US tariffs as the pivotal swing factor.