Next week promises to be a make-or-break period for Indian equities, dominated by US tariff uncertainties that could upend global trade dynamics. With the Sensex and Nifty logging gains last week, attention shifts to a packed calendar of events that could either extend the rally or spark corrections.
Central to the narrative is the RBI’s two-day policy review concluding Wednesday. Inflation remains sticky at 5.5%, constraining the central bank’s room to maneuver. Markets price in a 25 bps cut probability at just 20%, per futures.
Earnings deluge continues apace. Investors await numbers from Axis Bank, Wipro, and UltraTech Cement. Banking sector NPAs have improved, but loan growth slowdown raises flags. IT firms grapple with US client spending cuts.
Internationally, US Treasury yields at multi-month highs signal tighter financial conditions. China’s stimulus measures offer some offset, but effectiveness is questioned. Brent crude’s volatility impacts OMC stocks directly.
Flows data makes encouraging reading: FPIs net buyers to the tune of ₹15,000 crore in November so far. Retail participation stays robust via SIPs. Budget expectations linger, with capex allocations eyed for rail and defense.
Chart patterns reveal Nifty consolidating in a 24,000-24,600 range. A bullish engulfing candle Friday suggests upside potential. Bank Nifty lags, dragged by PSU banks.
Opportunities abound in undervalued midcaps, particularly in renewables and EVs. Avoid overleveraged names sensitive to rate changes. Tariff escalation risks favor importers over exporters.
Wrapping up, a balanced approach blending caution and conviction is essential. Track policy dovishness, earnings beats, and trade news religiously. Indian markets’ fundamentals remain solid, but external wildcards demand vigilance.