Inflation data, Q2 earnings, global trends to drive stock markets this week

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Inflation data, quarterly earnings and global trends will be the major driving factors for stock markets this week, analysts said.

Moreover, the trading activity of foreign investors would also influence the equity market trends.

"This week will be crucial, with several key macroeconomic data releases scheduled. On the domestic front, focus will be on India's CPI inflation and WPI inflation data, which will provide insights into the inflation trajectory and policy outlook.

"On the earnings front, quarterly results from prominent companies such as ONGC, Bajaj Finserv, Asian Paints, Tata Steel and Oil India will be closely tracked for sectoral cues," Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

The rupee-dollar trend and movement of Brent crude, the global oil benchmark, would also be crucial in driving investors' sentiment.

Ponmudi R, the CEO of Enrich Money, an online trading and wealth tech firm, said, "A slew of key domestic and global macroeconomic factors are expected to shape market sentiment in the week. On the domestic front, the upcoming release of October's Consumer Price Index (CPI) inflation data will be closely watched, as it is likely to offer investors clearer insights into the future path of interest rates."  Globally, all eyes will be on the ongoing US government shutdown, which has halted the release of key economic data crucial to investors and policymakers in assessing the actual state of the economy, he added.

In a holiday-shortened last week, the BSE benchmark tanked 722.43 points or 0.86 per cent, and the NSE Nifty declined 229.8 points or 0.89 per cent.

"Going ahead, market direction will depend on upcoming domestic inflation data, FII flows, developments related to the US government shutdown, and progress in trade negotiations involving the US, India, and China," Vinod Nair, Head of Research, Geojit Investments Limited, said.