Inflation data, trading moves, global trends to drive markets: Analysts

WPI inflation data, trading activity of foreign investors and global cues would dictate trends in the stock market this week, analysts said.

Besides this, movement of rupee against the US dollar and crude oil would also be tracked by investors, they noted.

Markets remained volatile and ended the last week in negative territory. Last week, the BSE benchmark index declined by 444.71 points, or 0.51 per cent.

"This week features an active domestic data calendar, with the release of India's Wholesale Price Index (WPI) inflation and trade balance figures. Developments related to India-US trade discussions will remain in focus, while globally, the performance and macro cues from US markets are expected to influence near-term sentiment," Ajit Mishra -- SVP, Research, Religare Broking Ltd, said.

Foreign investors pulled out Rs 17,955 crore ($2 billion) from Indian equities in the first two weeks of this month, taking the total outflow to Rs 1.6 lakh crore ($18.4 billion) in 2025.

Persistent foreign fund outflows and a sharp depreciation in the rupee weighed heavily on investor confidence, Mishra said.

"Equity markets are likely to remain highly volatile in the coming week as a heavy slate of global inflation data shifts investor focus back to the future course of monetary policy. With 10-year bond yields already edging higher across major regions, upcoming inflation prints from the US, Eurozone, and others will be closely scrutinised to assess whether the global monetary easing cycle is nearing its end," Ponmudi R, CEO - Enrich Money, an online trading and wealth tech firm, said.

The spotlight will firmly be on the US, where key macro releases, including consumer price inflation, retail sales, and non-farm payrolls, are expected to provide deeper insight into the underlying strength of the economy and the inflation outlook, he added.

Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, "Overall, we expect markets to remain range-bound with bouts of volatility in the broader indices, while any formal breakthrough on the India-US agreement could trigger a meaningful market up-move.