With Diwali knocking at the door, the mood remains optimistic among investors. Although the week doesn’t have any market holidays, festive season buying usually helps stocks, especially from consumer, auto, and banking counters. Historically, volumes do get bigger and benchmarks tend to close on a positive note in the pre-Diwali phase. Experts see sustained positive momentum, with Nifty’s resistance at 25,350 and support at 25,000, as traders prepare for the Muhurat session next week.
US-China Tariff War: Mixed Effects
The deepening US-China tariff war is both a risk and an opportunity. Indian exports can gain, particularly in manufacturing and textiles, as the US is increasing tariffs on Chinese products to 130% from November 1. The change could divert American demand to Indian goods. Supply chain disruptions and inflationary pressure on imported inputs, such as electronics and active pharmaceutical ingredients can be troubling for some sectors, particularly pharma and auto.
CPI Data Release: Inflation in the Limelight
September’s Consumer Price Index (CPI) data will be released this week and is expected to show further moderation, with headline inflation likely easing to around 1.2%, aided by food price declines. Lower inflation generally bodes well for investor sentiment and may support discretionary spending, boosting auto and retail stocks. Market watchers will keenly analyse the CPI impact for signals on RBI’s monetary stance and outlook for consumer-driven sectors.
Q2 Earnings: Sectoral Triggers Expected
More than 200 companies are to report Q2 numbers this week, led by Reliance Industries, Infosys, HCL Tech, Wipro, HDFC Bank, and ICICI Bank. IT and banking stocks will remain in the limelight, with HCL Tech likely to deliver moderate profitability growth but robust revenue growth. Experts expect positive surprises in major earnings to drive sectoral outperformance and general market appreciation.
Expert Views and Expectations
Market strategists expect the rally to extend, supported by festive optimism, stabilising foreign fund flows, and resilient corporate earnings. Motilal Oswal’s Siddhartha Khemka notes that normalised valuations and rebounding earnings could drive a clear market uptrend by year-end, with financials, autos, and consumption stocks leading the momentum. At the same time, analysts caution that volatility may spike, especially if global events or Q2 disappointments unsettle sentiment.
Overall, the week ahead is promising for Indian equities as celebrations and robust sector triggers are set to overpower any near-term threats from global volatility and earnings disappointments.
