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As the new week begins, investors are expected to monitor a mix of global and domestic cues to guide their market strategy. Analysts suggest that inflation metrics, the trading activity of foreign investors, and international developments—particularly on the trade front—will be key factors in shaping market sentiment.

The ongoing monsoon's trajectory and agricultural activity are also likely to influence investment decisions in the coming days, the experts pointed out.

Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted that macroeconomic indicators will be closely tracked, especially high-frequency data like CPI inflation. These figures will help gauge demand patterns and anticipate the Reserve Bank of India’s future actions.

“Additionally, the progress of monsoon and sowing patterns will be monitored due to their implications for rural consumption,” Mishra noted.

International events, particularly trade negotiations and movements in US bond yields, are expected to continue impacting investor mood, he added.

Domestic Rally Fuelled by RBI Move and Trade Optimism

Indian stock markets ended last week on a high note, buoyed by a significant policy move from the central bank. On Friday, the BSE Sensex gained 746.95 points (0.92 per cent) to close at 82,188.99, while the NSE Nifty crossed the 25,000 mark after a 252.15-point rise (1.02 per cent) to settle at 25,003.05. This rally followed the Reserve Bank of India’s unexpected 50 basis point rate cut, which energised rate-sensitive sectors.

“The aggressive RBI rate cut, backed by cooling inflation and a steady GDP outlook, is likely to support investor confidence amidst the ongoing global uncertainties,” said Vinod Nair, Head of Research at Geojit Financial Services.

Siddhartha Khemka, Head of Research (Wealth Management) at Motilal Oswal Financial Services Ltd, sees this momentum continuing. “We expect Indian markets to witness a gradual up-move, supported by positive sentiment following higher-than-anticipated rate cut by the RBI and optimism surrounding a potential US-India trade agreement with officials from both sides meeting in New Delhi to finalise the first phase of the proposed deal,” he said. He also cautioned that global risks such as shifts in US tariffs and ongoing geopolitical tensions could bring about volatility.

Meanwhile, Foreign Institutional Investors (FIIs) continued to show interest in Indian equities, purchasing shares worth Rs 1,009.71 crore on Friday, according to exchange data.