Inflation metrics, corporate results, and foreign fund flows to dictate market sentiment
Mumbai, January 12: Indian stock markets are expected to remain sensitive to key triggers in the upcoming week, including corporate earnings, critical macroeconomic data like CPI and WPI inflation, and foreign fund outflows, as per market experts. The markets continue to experience a corrective phase, with broad indices under pressure.
The December Consumer Price Index (CPI) data, scheduled for release on January 13, 2025, is highly anticipated, as it is expected to guide market expectations on interest rates ahead of the RBI’s monetary policy review in February, analysts noted.
Earnings and Data to Dominate Focus
Ajit Mishra, SVP, Research at Religare Broking Ltd, stated that the focus will now shift to corporate earnings, with major players like HCL Tech, Reliance, Infosys, Axis Bank, and Wipro set to release their results.
“Key macroeconomic data, including CPI and WPI inflation, will be closely monitored. In addition, foreign fund outflows and cues from US markets will play a crucial role in shaping investor sentiment,” Mishra added.
The Wholesale Price Index (WPI) data, due for release on January 14, will further shed light on price trends across food, fuel, and manufacturing. Manish Goel, Founder of Equentis Wealth Advisory Services, highlighted its importance for sectors like FMCG, agriculture, and energy, as inflation will influence consumer behavior, input costs, and corporate profitability.
Impact of RBI’s Upcoming Policy
Market participants are also awaiting the RBI’s monetary policy decision in February, with expectations of potential rate cuts. According to Goel, such measures could lower borrowing costs, encourage spending and investment, and help stabilize economic growth in the coming months.
Sector Performance and Market Trends
The markets recently extended their corrective phase, with indices losing 2.5% over the past week. Poor quarterly updates and concerns about HMPV virus outbreaks in India further dampened sentiment.
- Broader Market Performance: Midcap and smallcap indices declined sharply by 5.8% to 7.3%, reflecting broader market weakness.
- Sector-Wise Impact: IT, FMCG, and select pharma sectors showed resilience, while realty, energy, and metals faced significant pressure.
The Nifty and Sensex hit weekly lows of 23,431.5 and 77,378.91, respectively, as late-session selling erased mid-week recovery efforts.