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In the Indian stock market, investors’ focus will remain on several important indicators and events this week, which could determine the market’s direction. The biggest focus will be on third-quarter (Q3) earnings and results, as several large corporates and banks are set to disclose their financial performance. Apart from this, inflation data, developments related to trade policy, and global cues may influence the direction of the Indian market. Investors will pay close attention to what Q3 results reveal about companies’ operations and profitability, as this can impact both investor confidence and market direction.
Volatility may be seen in the market in the coming week, as apart from Q3 results and inflation-related data, uncertainty surrounding US trade policy and tariffs could also increase investor caution. The previous week ended with weak performance, and amid a series of declines, both the Sensex and Nifty indices remained under pressure, prompting investors to take cautious decisions.
Foreign Institutional Investor (FII) activity emerged as a key reason behind the weakness in the stock market last week. Selling by foreign institutional investors was recorded across consecutive sessions, keeping pressure on the market. According to available trading data, FIIs were net sellers in the cash market throughout the week, with heavy outflows seen on January 9. During the same period, buying by domestic institutional investors was insufficient to support the market, resulting in both the Sensex and Nifty indices continuing to drift lower.
This continuous selling by FIIs kept market sentiment weak. Foreign capital outflows occurred at a time when global uncertainty and caution around quarterly results were already present domestically. As a result, risk-taking appetite in the market remained limited, and selling was seen on every rise, leading to a sustained downward trend.
Trading patterns during the week indicated that foreign investors were maintaining distance from Indian equities. Concerns related to US trade policy, tariff uncertainties, and caution ahead of upcoming economic data further hardened the FII stance. In this environment, the market failed to find any strong trigger to provide support, leading the Sensex and Nifty to close under pressure.
Last week’s decline was not limited to technical factors alone, as continuous net selling by FIIs kept the market direction tilted downward. Ongoing foreign capital outflows and limited buying weakened investor sentiment, which was directly reflected in the performance of key indices.
Notably, Q3 results are expected from IT companies, banks, and the energy sector, including Tata Consultancy Services, HCL Technologies, Infosys, Wipro, and Reliance Industries. These results will provide comprehensive signals about companies’ growth rates, profit margins, and future strategies, which could influence market volumes and investment sentiment. Along with this, inflation data such as CPI and WPI, foreign investment flows, and trade deficit figures may also guide market decisions.
At the global level as well, uncertainty continues to be a major factor weighing on markets, especially developments related to US trade policy and tariffs. If there are changes or clear decisions on tariff policies from the US, their impact could be felt across global markets as well as the Indian stock market, potentially increasing risk sentiment. In such a scenario, investors will keep an eye on stocks and sectors that can reduce risk or offer opportunities under current conditions.
This week, apart from Q3 results and inflation data, FII activity and movements in crude oil prices will also play an important role in determining market direction. If these indicators turn positive, the market may witness an uptrend, while disappointing data could increase pressure. Investors are being advised to remain cautious and take investment decisions while keeping quarterly results, economic data, and global developments in mind.
