India's equity markets are likely to stay volatile after profit-booking dominated the last two trading sessions of the previous week. Sentiments weakened further due to escalating tensions between India and Pakistan following the deadly terror attack in Kashmir. However, foreign institutional investors (FIls) turning net buyers and robust Q4FY25 earnings from banking stocks provided some support.
Analysts suggest that market direction in the coming week will hinge on key domestic and global factors, including Q4FY25 earnings, India's industrial production (IIP) data, Fll activity, and crucial economic indicators from the US.
"The week from April 28 to May 2, 2025, is set to bring another series of crucial economic releases that could impact global market dynamics and investor sentiment. In India, attention will be on the Industrial Production (YoY) data for March, scheduled for release on April 28, which will offer insights into the strength of the country's manufacturing and industrial sectors," said analysts at Bajaj Broking Research.
Ajit Mishra, Senior VP, Research, Religare Broking said that the upcoming holiday-shortened week also marks the beginning of a new month, making monthly auto sales data a key area of focus for market participants. On the macroeconomic front, investors will closely track the Index of Industrial Production (IIP) data and the HSBC Manufacturing PMI Final data. Meanwhile, geopolitical developments between India and Pakistan will remain on the radar
On the corporate earnings front, several prominent companies—including BPCL, IOC, Kotak Mahindra Bank, SBI, Bajaj Finance, TVS Motor, and UltraTech Cement—are set to release their quarterly results. Globally, updates related to tariffs and trade will also be watched closely.
“In the current scenario, it is advisable to maintain a positive yet cautious approach, with a preference for hedged positions in the index. Stock-specific opportunities are likely to remain abundant on both the long and short sides. Hence, the focus should be on identifying stocks with favourable risk-reward setups,” added Mishra.
Indian equity markets extended their winning streak for the second consecutive week, though gains were capped by profit booking on Friday amid escalating geopolitical tensions between India and Pakistan following the Pahalgam terrorist attack.
The Nifty50 and BSE Sensex advanced 0.80% for the week, closing at 24,039.35 and 79,212.53, respectively. The positive momentum was largely supported by progress in the bilateral trade agreement between India and the United States, alongside easing concerns over the U.S.–China trade dispute, both of which lifted investor sentiment. Additionally, stronger-than-expected quarterly results from key banking majors contributed to the market's upward trajectory.
On a sectoral basis, the IT index emerged as the top performer with a weekly gain of 6.56%, while the Media sector underperformed, declining by 2.11%.
Puneet Singhania, Director at Master Trust Group said that the RSI remaining above the 14-day SMA indicates ongoing strength. Immediate support levels are placed at 23800 and 23500 which also align with the 21DEMA. “On the upside, resistance is seen at 24360, and a move above this may open the path toward 24700. A buy-on-dips approach is considered favourable though caution is advised with potential market volatility,” added Singhania.
Foreign Portfolio Investors (FPIs) turned aggressive net buyers, attracted by favourable valuations, particularly in the financial space.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said that there is a distinct trend reversal in FII strategy in India. During the last eight days FIIs were sustained buyers in the Indian market. The cumulative buy figure through the exchanges during this eight-day period is Rs 32,465 crore.
“An interesting point in this reversal of FII strategy is that it has happened at a time of heightened India-Pak tensions following the Pahalgam terror attacks. So, what are the strong factors driving FII flows into India ignoring the serious geopolitical tensions? The answer lies in two factors. One, the sustained rise in the dollar which triggered the momentum trade towards US equities has reversed with the dollar index falling from a peak of 111 in mid-January this year to around 99 now. Two, the steep decline in US growth expected this year will impact corporate earnings in the US while the Indian economy will continue to remain resilient with growth of above 6% accompanied by recovery in corporate earnings,” added Vijayakumar.