Week ahead: Q1 earnings, Inflation data, crude oil prices and FIIs activity among key market triggers to watch

Indian markets snapped a four-week winning streak, with benchmark indices ending marginally lower amid renewed geopolitical tensions in the Middle East. However, sustained institutional buying, steady progress in the southwest monsoon and the start of the June-quarter earnings season helped the market recover from its intra-week lows.

For the week, the NIFTY50 declined 0.2%, to close at 24,206, while the Sensex fell 0.2%, to settle at 77,569. Despite weakness in the frontline indices, the broader market remained strong. The Nifty Midcap 150 gained 1.2% and the Nifty Smallcap 250 rose 0.6%.

Sectoral performance remained mixed, with Real-Estate and Consumer-oriented sectors leading the gains. The Nifty Realty index surged 5.3%, emerging as the top performer, followed by Consumer Durables, which gained 3.7%.

NIFTY IT index also advanced 2% as investors positioned for the earnings season, while the Metal index gained 0.7%. On the downside, FMCG was the major laggard with a decline of 1.6% and Defence slipped 0.9%, respectively.

NIFTY PSU Bank index staged a sharp rebound from the 8,050 support zone, rising 3% on Friday and closing at 8,451. The index has reclaimed its 20-day EMA near 8,416 and closed marginally above the 50-day EMA around 8,442, signalling an improvement in short-term momentum. However, the broader structure remains range-bound. The ADX reading near 15 indicates that the prevailing trend is still weak, so confirmation above resistance will be important before expecting a sustained directional move.

In India, the Q1 earnings season will gather pace with HCL Tech reporting on Monday, followed by L&T Technology Services and Tata Elxsi on Tuesday. Financial stocks will remain active midweek as HDFC AMC, HDFC Life, ICICI Lombard and ICICI Prudential Life announce results. Later in the week, investors will track earnings from Wipro, Tech Mahindra, BHEL and Polycab, while Reliance Industries, Jio Financial Services, JSW Steel and Havells will be among the key companies reporting towards the end of the week.

Market breadth

Market breadth improved during the week, with 56% of NIFTY50 stocks closing above their 50-day moving average, compared with levels near 46% earlier in the week. The recovery indicates that participation broadened after the recent pullback, even though the benchmark index ended the week marginally lower.

Foreign investors positioning

Foreign institutional investors turned net buyers in July after four consecutive months of selling. FIIs purchased Indian equities over ₹4,000 crore so far during the month, marking a tentative improvement in overseas flows after the heavy withdrawals seen between March and June.

NIFTY50 outlook

The NIFTY50 rebounded strongly from the 23,800 support zone, gaining 1% on Friday. The index has reclaimed its 20-day and 50-day EMAs, placed near 24,010 and 23,935, respectively. However, the broader price structure remains indecisive as NIFTY50 continues to trade near the intersection of a falling channel and a short-term rising channel. The ADX reading near 12 also indicates weak trend strength, suggesting that the index may remain volatile and range-bound until a decisive breakout occurs.

For the coming week, 24,250–24,300 will act as the immediate hurdle. A sustained move above this zone can push the index towards the key resistance at 24,530. On the downside, 24,000–23,935 is the first support zone, followed by the crucial level of 23,818. A decisive close below 23,818 would invalidate the short-term recovery.

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