Mumbai (Maharashtra) [India], January 19: Indian markets are likely to remain cautious next week, influenced by a mix of global and domestic factors, including third-quarter earnings results, foreign fund outflows, and US policies under the new administration of Donald Trump.
Market analysts suggest that investors will closely monitor key indicators such as US bond yields, the US Dollar Index, crude oil prices, and corporate earnings in the coming days.
Ajit Mishra, SVP of Research at Religare Broking Ltd, noted, “We anticipate the market to maintain a cautious tone next week due to several domestic and global factors.”
Experts believe that global markets, especially the policies under the incoming US presidency, will play a significant role in shaping investor sentiment. Manish Chowdhury, Head of Research at StoxBox, pointed out that factors such as US bond yields, the Dollar Index, and crude oil prices will be crucial. He also mentioned that investors would be watching trade policies under President-elect Donald Trump, as they could lead to inflation and further capital outflows from emerging markets like India.
Manish Goel, Founder and Managing Director of Equentis Wealth Advisory Services, anticipates that sectors such as IT and pharmaceuticals could face uncertainty due to potential US policy shifts. However, he also sees opportunities for sectors like defence and energy, which may benefit from stronger bilateral ties. He added, “Trump’s focus on traditional energy sources and fossil fuels could slow global green energy progress, impacting India’s renewable sector.”
On a positive note, experts highlighted the growing impact of the Maha Kumbh Mela, a major spiritual event, which is boosting India’s tech and tourism industries. Digital platforms and travel businesses are seeing significant growth in app downloads and bookings, presenting potential for market expansion.
Additionally, developments during the World Economic Forum (WEF) Annual Meeting in Davos from January 20-24 will be closely watched by market participants.
In the last trading sessions, the markets continued their consolidation phase, with a nearly 1% decline as the corrective trend persisted. Foreign Institutional Investors (FIIs) continued their selling spree, while mixed corporate earnings and rising crude oil prices dampened investor sentiment. However, easing retail inflation and strength in select heavyweight stocks helped limit the decline.
The benchmark indices, Nifty and Sensex, closed at 23,203.2 and 76,619.33, respectively. Sector-wise, there was a mixed trend, with metals and energy sectors showing gains, while IT stocks faced sharp declines due to weak earnings, followed by drops in the realty and FMCG sectors. Interestingly, broader indices showed resilience, ending almost flat despite the market volatility.