Key factors to drive stock markets this week

Equity investors are up for an eventful trading week ahead as the 90-day suspension period of the reciprocal tariffs announced by US President Donald Trump ends on July 9, analysts said, adding that a positive outcome from the trade negotiations could further lift market sentiment, particularly benefiting trade-sensitive sectors.

Illustration: Uttam Ghosh/Rediff

Besides, Q1 earnings from IT major TCS and foreign fund movement would also dictate sentiment at the Dalal Street, experts said.

July 9 marks the end of the 90-day suspension period of the Trump tariffs imposed on dozens of countries, including India.

An additional import duty of 26 per cent was announced on Indian goods entering the US.

“This week holds significant importance not only for Indian markets but for global equities as well.

“The most anticipated event is the outcome of the US trade (tariff) deadline on July 9, which could shape global trade dynamics.

“Investors will also closely monitor the release of the US FOMC (Federal Open Market Committee) minutes on the same day,” Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Domestically, the spotlight will shift to corporate earnings, with IT major TCS and retail giant Avenue Supermarts among the prominent companies scheduled to report their quarterly results, setting the tone for the Q1 earnings season, he added.

Movement in global oil benchmark Brent crude and the rupee-dollar trend would also be monitored by investors this week.

“A positive outcome from the US-India trade negotiations could further lift market sentiment, particularly benefiting trade-sensitive sectors like IT, pharma, and auto.

“Considering the broader indices currently trading at elevated levels, the market participants will closely watch for signs of earnings catch-up from upcoming Q1—starting this week,” Vinod Nair, Head of Research, Geojit Investments Limited, said.

Last week, the BSE benchmark Sensex dropped 626.01 points or 0.74 per cent, and the NSE Nifty declined 176.8 points or 0.68 per cent.

“Overall, we expect the market to remain in consolidation mode, awaiting clarity on the India-US trade deal; while stock specific action would continue on the back of Q1 FY26 business updates ahead of the earnings season starting this week,” Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

On foreign fund flows, V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “Resumption of FII (Foreign Institutional Investors) buying will hinge on two things: One, if a trade deal happens between India and US that will be positive for markets and FII flows; two, Q1 FY26 result indications. If the results indicate earnings recovery, that will be positive. Disappointment on these factors can impact the market and, thereby, FII flows.”