Macroeconomic data, global events to steer markets next week: Analysts

Macroeconomic data, global geopolitical developments and rising concerns over AI-related disruptions are likely to dictate sentiment in the stock market next week, even as investors may remain cautious amid ongoing volatility, according to analysts.

Besides, the trading activity of foreign investors and domestic currency movements will also guide market movement during the week.

"In the near term, with tariffrelated concerns easing and the domestic earnings season drawing to a close on a mixed trend, market focus will hinge largely on global cues, including the US labour data and shifting expectations surrounding the US Fed's policy path.

"However, the overall sentiment is likely to remain cautious as investors monitor global AI-driven disruptions and geopolitical risks, while improved valuations and constructive GDP forecasts may help sustain FII inflows," Vinod Nair, Head of Research, Geojit Investments Ltd, said.

With IT and metals facing persistent structural and external headwinds, market leadership may rotate toward domestically oriented sectors such as banking, autos, and select consumption-driven segments. However, broader indices are expected to remain range-bound until clearer macroeconomic and policy signals emerge, Nair said.

On a weekly basis, the 30-share BSE Sensex slumped 953.64 points, or 1.14 per cent, while the NSE Nifty dropped 222.6 points, or 0.86 per cent. Both indices closed the week on a negative note as a global selloff in technology stocks and concerns over artificial intelligence-led disruptions weighed on the sentiment.

"Markets will monitor WPI inflation and balance of trade data for signals on price trends and external sector dynamics. High-frequency indicators due include HSBC flash PMI readings for manufacturing, services, and composite, along with bank loan growth and foreign exchange reserves data.

"These releases will be evaluated for confirmation of growth momentum amid volatile global cues and continued repricing in technology stocks," Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

In the previous week, the stock market was largely supported by favourable India-US trade deal development and renewed FII inflows that lifted overall risk appetite.

"Momentum extended on supportive global cues and rupee appreciation, although bouts of profit-booking emerged as Q3 earnings continued to deliver mixed signals. The sentiment turned cautious amid a global sell-off triggered by escalating concerns over AI-related disruptions, leading to sharp selling in IT stocks," Nair said.

The rupee consolidated in a narrow range and settled 5 paise lower at 90.66 against the US dollar on Friday.

Geopolitical tensions also weighed on market breadth, causing the earlier optimism to fade and prompting a broad rise in sectoral volatility and widespread selling pressure.

Strong US jobs data further reduced expectations of near-term Federal Reserve interest rate cuts, pressuring global risk assets and contributing to the domestic market's weakness, Mishra said.

Analysts said broader indices are likely to stay range-bound until clear macroeconomic and policy signals emerge. Investors will also watch the minutes of the Federal Open Market Committee (FOMC) to be released on Thursday for cues on the US central bank's monetary policy outlook.