Services PMI, Forex Reserves and Infra Output to Steer Market Sentiment Next Week

Mumbai- With the Q2 earnings season nearing its end, domestic economic indicators — including the services PMI, infrastructure output data, and developments around the NDA’s government formation in Bihar — are expected to guide market sentiment next week, market analysts said on Sunday.

Globally, investors will keep an eye on major U.S. data releases, particularly the minutes of the latest Federal Reserve FOMC meeting.

Ajit Mishra of Religare Broking noted that volatility in AI-related stocks will also play an important role in shaping broader market trends.

This week, Indian markets saw a strong rebound, recovering steadily after a phase of weakness. Despite some volatility driven by mixed global cues, domestic sentiment remained largely positive.

A sharp decline in India’s retail inflation — dropping from 1.44% in September to 0.25% in October — boosted investor confidence. Wholesale inflation also dipped into negative territory, falling 1.21% in October due to softer crude oil prices and lower costs of non-food items.

Mishra added that robust macroeconomic indicators, including a 7% year-on-year rise in net direct tax collections to over ?12.92 lakh crore, signalled strong corporate profitability and stable income growth. Political optimism stemming from expectations of an NDA victory in Bihar also supported risk appetite.

On the back of these positive cues, the Nifty gained over 1.5% to close at 25,910.05, while the Sensex settled at 84,562.78.
IT, pharma, and auto stocks led the recovery, with most sectors performing well due to easing inflation, steady demand, and improving global sentiment.

One of the standout highlights of the week was the banking index hitting a record high. The only sector to end slightly lower was real estate, likely due to profit booking after earlier strong gains.

The India VIX declined 4.94% to 11.9375, signalling reduced volatility and a more stable market outlook heading into the next week.

With inputs from IANS