Services PMI, Foreign Reserves And Infra Output Data: What to expect for market sentiment next week

As the second-quarter earnings season winds down, the market’s direction next week is expected to be shaped by key domestic indicators including services PMI, infrastructure output data and political developments around NDA’s government formation in Bihar. Global markets will also be influenced by U.S. economic releases, particularly the minutes of the latest Federal Reserve meeting.

Those tracking market trends said volatility in global technology counters linked to the AI trade may continue to affect sentiment across regions, adding another layer of uncertainty to the week ahead.

Market-Sentiment: What could drive mood on Dalal Street next week?

Add Zee Business as a Preferred Source

After a phase of weakness, the domestic indices staged a strong rebound this week, ending firmly in the green. Early optimism was supported by local cues, even though global signals remained mixed in the later part of the week.

Lower GST rates and easing food prices drove a sharp drop in retail inflation, which fell from 1.44 per cent in September to 0.25 per cent in October. Wholesale inflation also moved deeper into negative territory, recording a fall of 1.21 per cent in October due to softer crude and lower non-food prices.

Additional comfort came from strong macroeconomic data. Net direct tax collections rose 7 per cent year-on-year to more than Rs 12.92 lakh crore, reflecting healthy corporate profitability and steady income growth. Expectations of an NDA victory in Bihar added to political confidence and improved risk appetite.

How did the markets perform this week?

Supported by these cues, both benchmark indices gained more than one and a half per cent. The Nifty closed at 25,910.05 and the Sensex settled at 84,562.78. IT, pharmaceutical and automobile counters led the recovery, while most sectors saw broad-based participation as inflation eased and consumption trends remained steady.

The banking index set a new record high and emerged as one of the standout performers. Real estate was the only sector to end slightly lower, largely attributed to profit-taking after an extended rally.

India VIX closed at 11.9375 after a 4.94 per cent fall during the week, signalling a calmer market backdrop and reduced volatility.

With the earnings season nearly over, investors are expected to look closely at domestic macro data in the coming days to gauge whether the positive momentum can hold.