RBI's interest rate decision, macroeconomic data, global trends to drive stock markets this week: Analysts

RBI's interest rate decision, macroeconomic data announcements and global trends are the key factors that would dictate the momentum in the equity market this week, analysts said.

Moreover, trading activity of Foreign Institutional Investors (FIIs) and developments on the tariffs front would also guide investors' sentiment, experts noted.

"Looking ahead, all eyes will be on the outcome of the RBI’s Monetary Policy Committee (MPC) meeting scheduled for June 6. Additionally, with the new month beginning, participants will track high-frequency data including auto sales numbers and other economic indicators. Updates on the progress of monsoon and the trend in FII flows will also be closely monitored," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Globally, developments in the US bond market and any updates regarding the ongoing trade negotiations will continue to influence investor sentiment, he added.

The Indian economy expanded at a faster pace than expected in the last quarter of the 2024-25 fiscal, helping clock a 6.5 per cent growth rate in the year that elevated its size to USD 3.9 trillion and held promise of crossing the world's fourth-largest economy Japan in FY26.

The economy grew at 7.4 per cent in January-March - the fourth and final quarter of April 2024 to March 2025 fiscal (FY25) - reflecting a strong cyclical rebound that was helped by a rise in private consumption and robust growth in construction and manufacturing.

Meanwhile PMI (Purchasing Managers’ Index) data for manufacturing and services sectors to be announced this week would also influence trading in the market.

"This week, interest rate-sensitive sectors—particularly PSU banks—are likely to remain in focus amid growing hopes of an RBI rate cut. Additionally, the release of monthly auto sales and volume data could trigger sector-specific moves in the automobile space," Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

Last week, the BSE benchmark declined 270.07 points or 0.33 per cent and the NSE Nifty dipped 102.45 points or 0.41 per cent.

Vinod Nair, Head of Research, Geojit Investments Limited, said, "The market is pricing in a 25 bps cut, which will improve the outlook for rate-sensitive sectors. The positive macroeconomic scripts can boost investor sentiments, but stability in the broader market will be contingent on strong earnings growth and receding trade tensions."