Market outlook: Q1 earnings, FII inflow, monsoon updates key factors to drive markets next week

The Indian equity market had one of its best weeks of 2024, with the Nifty and Sensex reaching record highs of 24,592.20 and 80,893.51, respectively, before closing at 24,502.15 and 80,519.34. This resulted in gains of 0.73% for the Nifty and 0.65% for the Sensex, marking the sixth consecutive week of gains for both indices. Notably, the Nifty closed above 24,500 for the first time ever.

In contrast, small-cap and mid-cap stocks underperformed compared to large-cap stocks, although several PSU stocks posted stellar gains last week. The market outlook for the coming week will be influenced by various domestic and international factors.

Domestically, upcoming budget-related announcements, Q1 FY25 results, monsoon updates, and foreign institutional investment (FII) inflows will be key points of interest for investors.

Globally, attention will be on China, which is set to announce its GDP and Index of Industrial Production (IIP), along with speculation about a significant economic stimulus announcement that could impact the metal sector. Other global factors to watch include the US Federal Reserve Chairman’s speech, US retail sales figures, and macroeconomic data from Japan, all of which are likely to influence market movements and investor sentiment.

Vinod Nair, Head of Research at Geojit Financial Services, commented: "We expect stock-specific movements to gain traction due to the ongoing earnings season; IT, in particular, will be in the spotlight due to a strong start to earnings and a positive outlook."

Arvinder Singh Nanda, Senior Vice President of Master Capital Services, noted that Nifty’s breakout from the psychological resistance level of 24,500 on the daily chart indicates that the bullish trend is likely to continue into next week. "Despite this positive trend, buying on dips is expected to provide resilience to the market. However, strong upward movements may attract profit booking, making a sustained rally challenging," Nanda added.