Q2 earnings, inflation data, oil prices to guide stock markets this week: Analysts

Major quarterly earnings from companies like Wipro and HCL Tech, along with inflation figures, global trends, and crude oil price movements, will drive stock market movement this week, analysts said.

Market investors will also watch foreign investor trading activity, rupee movement, US Treasury yields, and geopolitical developments.

"September CPI inflation will be the first major domestic test this week. A stronger-than-expected reading could revive concerns over further RBI tightening, putting rate-sensitive sectors such as banking, automobiles and real estate under pressure while raising the risk of a broader drag on consumer demand.

"A softer print could ease concerns over the eventual peak in interest rates, but any relief may prove short-lived if Brent crude remains above USD 100 a barrel. Wholesale price inflation data will offer a further indication of how elevated energy and logistics costs are filtering through to producer prices," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a research analyst firm, said.

US inflation and retail sales data will influence Treasury yields and the dollar, he said.

"The IT sector will remain in focus as HCL Technologies, Wipro and Tech Mahindra report their September quarter results. The sector staged a sharp rebound on Friday following TCS's better-than-expected earnings, but whether the recovery gains traction will depend on the performance of its peers and their outlook for the coming quarters," Radhakrishnan added.

IT stocks emerged as major catalysts behind the market's sharp recovery on Friday, following an over 4 per cent rally in TCS after it reported better-than-expected September quarter results.

Indian IT companies largely brushed aside the news regarding the US suspending eight IT firms, including TCS, Infosys, Wipro, Cognizant and Microsoft, from a programme that allowed applications for green cards for foreign workers, contending that the practice has shut out Americans from the job market.

TCS on Friday said it does not expect the US action on the green card programme to affect its workforce strategy or customer engagements, as India's largest IT services company cited its single-digit applications under the programme over the past two years and its focus on local hiring.

Forthcoming results this week are from BHEL, Canara Bank, HDB Financial Services, HDFC Asset Management Company and Nestle.

"Indian equities are expected to consolidate this week as markets balance improving domestic earnings momentum against elevated global risks. Brent crude remains above USD 100 per barrel and sustained FII selling continues to weigh on sentiment. After eight consecutive weeks of declines, the Nifty-50 gained 0.4 per cent last week, suggesting some stabilisation at lower levels, although the broader market is likely to remain selective," Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

Domestically, September CPI and WPI inflation data will be closely tracked for signs of further price pressures, while the 2QFY27 earnings season gathers pace, he said.

"Key global data points include US CPI and jobs data, EU CPI and UK GDP," Khemka added.

Last week, the BSE benchmark Sensex jumped 562.63 points, or 0.78 per cent, and the NSE Nifty was up 98.5 points, or 0.43 per cent.

"Corporate earnings will increasingly influence sector-level performance as the September quarter results season gathers pace. TCS’s results helped trigger a rebound across IT stocks, supporting the broader indices on Friday. Crude oil remains the biggest macroeconomic risk. Uncertainty over Iran, the Strait of Hormuz and regional energy infrastructure continues to leave global supply vulnerable to disruption," Ponmudi R, CEO – Enrich Money, an online trading and wealth tech firm, said.