Stock market is gearing up for an eventful week ahead where key triggers such as quarterly earnings from corporates, the US Fed interest rate decision and the upcoming Union Budget for 2026-27 would grab the limelight, analysts said.
Trading pattern in the stock market this week will largely depend on the ongoing Q3 earnings announcement from corporates, global trends, and foreign fund movement, analysts said. Moreover, geopolitical developments and any update on trade negotiations would also be keenly tracked by investors, experts noted.
The consumer price index (CPI)-based inflation hitting an all-time low in October would encourage the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) to cut the policy repo rate in its upcoming December 3-5 meeting. However, the July-September GDP growth, expected to be above 7 per cent, may act as a deterrent.
In a world fractured by uncertainty, India stands out for its policy consistency, paired with sustained ambition, points out Pritam Banerjee.
Foreign portfolio investors have started 2026 on a cautious note, extending their selling streak from last year by withdrawing Rs 7,608 crore ($846 million) from Indian equities in the first two trading sessions of January. The withdrawal of funds followed the largest outflow of Rs 1.66 lakh crore ($18.9 billion) recorded in 2025, triggered by volatile currency movements, global trade tensions and concerns over potential US tariffs, and stretched market valuations.
Sustaining 8 per cent-plus growth rates is necessary if we are to reach high-income status by 2047, points out Amitabh Kant.
Prime Minister Narendra Modi on Tuesday announced the signing of the India-EU Free Trade Agreement (FTA), saying it accounts for 25 per cent of global GDP and one-third of global trade.
Asia takes the lead, boasting four Indian cities on the list, according to the 2024 Savills Growth Hubs Index.
India and the European Union are set to announce on January 27 the conclusion of negotiations and finalisation of a free trade agreement, which is aimed at boosting economic ties between the two regions amid disruptions in global trade due to US tariffs, an official said.
Stock markets are likely to trade in a range-bound manner in a holiday-shortened week where trading activity of foreign investors, currency movement and global macroeconomic data announcements are expected to drive sentiments, analysts said. Several global markets may see subdued activity on account of Christmas and New Year holidays, an expert said.
'Trump says India will buy over $500 billion of US goods.' 'At present, India's annual imports of goods and energy from the US are under $50 billion.' 'Reaching $500 billion would likely require more than 20 years, suggesting the figure refers to a long-term aspiration rather than a near-term commitment.'
'Instead of one or two families controlling 10% to 15% of GDP, it has to be broad based. Then, the resilience of the economy also will be higher.' 'Then, if something happens to one business, it will not hurt the economy badly.'
The Reserve Bank of India (RBI) on Friday delivered a 25 basis point (bps) repo rate cut analysts expected, driven by the strong 8.2 per cent GDP growth in the September quarter. However, analysts do not expect a runaway market rally as the impact of US tariffs continues.
Investment proposals for around Rs 1.88 trillion through 35 major agreements, spread across deep tech, green energy, and aerospace, were the hallmark moment of the first day of the two-day "Telangana Rising Global Summit", which started on Monday.
He spoke about North Atlantic Treaty Organisaiton (NATO) and Greenland, with an emphasis on ownership, while also hinting that China would not take any steps against Taiwan, till Trump was in office.
India's services sector growth moderated in December, as the rates of expansion in incoming new work and output eased to the slowest in 11 months, and companies refrained from recruiting additional staff, a monthly survey said on Tuesday. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 59.8 in November to 58.0 in December, indicating the slowest rate of expansion since January.
The Reserve Bank of India (RBI), in its Financial Stability Report (FSR), cautioned that stress tests indicate two scheduled commercial banks (SCBs) may have to dip into their capital conservation buffers (CCBs), unless stakeholders infuse capital, under a scenario involving a gradual slowdown in domestic GDP growth and a moderate rise in inflation, with limited policy easing space available to the central bank.
Retail inflation rose to a three-month high of 1.33 per cent in December 2025 mainly due to higher prices of kitchen essentials, including vegetables and protein-rich items.
'The bigger unknown remains global geopolitics, which is inherently unpredictable, including developments in our neighbourhood.' 'Another concern is the increasing tilt of government finances towards welfare subsidies, especially at the state level.' 'This could constrain capital expenditure, which is critical for long-term growth.'
'...a mix of asset classes.' 'Include equities for growth (across market caps), debt for stability and liquidity, gold as a hedge against macro and currency risk, and global assets for geographical and economic diversification.'
A shift appears underway in India's tax landscape. States with relatively smaller tax collections like Odisha and Telangana are emerging as the fastest-growing contributors to indirect and direct tax collections, respectively.
'Given that the population is almost evenly split, the Indian economy cannot grow without women participating in the workforce.' 'While women's participation has increased, it is still well below 40 per cent,' says Kartik Narayan, CEO of the professional networking and jobs platform, Apna.
The 25 per cent US tariffs, plus a penalty for Russian imports, could dent India's GDP growth by 30 basis points in the current fiscal, but the higher duty is unlikely to significantly affect India's domestic demand-driven economy, Barclays said on Thursday. If the 25 per cent tariff, announced by US President Donald Trump on Wednesday, is implemented from August 1, the effective average US import tariff on Indian goods will rise to 20.6 per cent in trade-weighted terms, as per Barclays estimates.
The shares of Titan Company hit its all-time high on the BSE and was the top gainer in the Sensex on Wednesday after the company released its business update for the third quarter of 2025-26 (Q3FY26). The stock closed at 4,272, up 3.94 per cent as compared to the Sensex, which was a tad down.
I am inclined to believe that the Venezuela adventure is not an indication of American strength, alas, but rather of American weakness, points out Rajeev Srinivasan.
The Indian economy is growing at a robust pace, driven by strong domestic demand, low inflation, and the healthy balance sheets of banks, said a Reserve Bank report released on Wednesday.
From the Sensex firms, State Bank of India, Bajaj Finserv, Bajaj Finance, Maruti, HCL Tech, Larsen & Toubro, Mahindra & Mahindra and Infosys were among the major winners. However, Hindustan Unilever, Eternal, Tata Motors Passenger Vehicles, and Sun Pharma were among the laggards.
Among Sensex firms, Bajaj Finance, Sun Pharma, Trent, Mahindra & Mahindra, State Bank of India and Bajaj Finserv were the major laggards. However, Tata Motors Passenger Vehicles, Maruti, Bharat Electronics, Kotak Mahindra Bank, Adani Ports and HCL Tech were among the gainers.
* Repo rate reduced by 25bps to 5.25 pc; * 4th rate cut, totalling 125 bps, since February 2025; * MPC also decided to continue with neutral stance; * GDP growth forecast for FY26 raised to 7.3 pc from 6.8 pc;
Retail inflation inched up to 0.71 per cent in November on rising prices of vegetables, protein-rich items, and fuel, government data showed on Friday. The consumer price index (CPI)-based retail inflation had fallen to a record low of 0.25 per cent in October, mainly due to lower prices helped by GST rate cuts and a favourable base.
While participants in the domestic financial market are expecting a 25 basis-point policy repo rate cut in the December meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), economists remain torn between a reduction in rate cut and a pause.
Macroeconomic data, global market trends and trading activity of foreign investors will be the key drivers for dictating market sentiment this week, analysts said. "This week, volatility may increase ahead of the November derivatives expiry. Domestically, markets will track several high-impact macro releases, including Q2 GDP data and industrial production.
S&P Global Ratings on Tuesday upped India's GDP growth forecast for the current fiscal to 6.5 per cent, citing lower crude prices, monetary easing and normal monsoon, and said the ongoing geopolitical tensions are unlikely to put a "significant pressure" on the rupee or inflation.
India's real GDP growth in FY26 will slide further to 6.2 per cent in FY26 from 6.5 per cent in FY25, a Japanese brokerage said on Monday. In a research report, Nomura said there is a "divergence" between the growth in GST collections and across other high-frequency growth indicators like auto sales and bank credit growth.
'Some success has been achieved in raising the costs of terrorism for Pakistan.'
Wholesale price inflation (WPI) came in at (-) 0.32 per cent in November, driven by an uptick in prices of food articles like pulses and vegetables on a month-on-month basis, government data showed on Monday.
The power sector presents a puzzle. A fast-growing economy should be aligned to higher power demand but that hasn't been the case in the financial year 2026 till date (FY26TD).
'Calibrated depreciation will help rebalance external fundamentals, offset some of the tariff differentials with competitors, improve the competitiveness of domestic substitutes vis-a-vis Chinese imports, and contribute to the easing of financial conditions at a time when the inflation rate is unusually low,' explains Sajjid Z Chinoy, head of Asia Economics at JP Morgan.
The rupee recovered 55 paise from its all-time low level to close at 90.38 against the US dollar after a volatile trade on Wednesday, amid suspected aggressive central bank intervention.
India needs to increase the investment rate to 34-35 per cent from 31-32 per cent currently to achieve a growth rate of 7 per cent and above, said S Mahendra Dev, chairman, economic advisory council (EAC) to the Prime Minister, on Wednesday.
