NEW DELHI, India — Indian equity markets enter the coming week with several domestic and global triggers in focus, including India’s July retail inflation data, Q1 corporate earnings, U.S. inflation figures, Foreign Institutional Investor (FII) activity and developments in U.S.-Iran peace negotiations. The NIFTY50 ended the previous week at 24,570 after gaining around 0.7%, while the SENSEX rose approximately 0.5% to 78,499.
Key Highlights
- India’s July retail inflation data will be released on Wednesday, followed by wholesale inflation on Friday.
- U.S. July CPI, producer inflation and retail sales data will provide important global market cues.
- FIIs were net buyers of Indian equities worth ₹2,887 crore in August but remained net short in index futures.
- NIFTY50 faces immediate resistance at 24,774, while the 24,400–24,428 zone remains a key support area.
India Inflation Data to Set the Tone
The key domestic economic trigger for investors will be India’s July retail inflation reading, scheduled for Wednesday. The data will be closely assessed after consumer inflation stood at 4.38% in June.
Investors will particularly watch the impact of food prices and uneven monsoon rainfall on the latest inflation number. Wholesale inflation data for July, due on Friday, will provide another measure of price pressures in the Indian economy.
The inflation figures come after the Reserve Bank of India kept the repo rate unchanged at 5.25% and retained its neutral policy stance. At the same time, the central bank raised its FY27 GDP growth forecast to 6.7% and lowered its inflation projection to 5%.
US Inflation and Treasury Auction in Focus
Global markets will also track the United States closely, with July consumer inflation data due on Wednesday. The CPI report will offer investors fresh evidence on whether inflation is easing after weaker labour market data.
Producer inflation is scheduled for Thursday, while U.S. retail sales figures are due on Friday. Together, these releases could influence expectations around the global economic outlook and market sentiment.
The U.S. Treasury’s 10-year note auction on Wednesday will also be important amid elevated bond yields. Weak demand could push the 10-year yield higher, potentially strengthening the dollar and creating pressure on global equities.
US-Iran Talks Keep Crude Oil on the Radar
Crude oil prices were among the most important global market drivers during the previous week as expectations of progress in U.S.-Iran negotiations reduced the geopolitical premium in oil prices.
Brent crude settled at $83.55 a barrel, down around 5% for the week, while WTI declined 7.7% to $78.18. Prices fell sharply on Monday after the U.S. cancelled a planned attack on Iran, although oil later recovered as uncertainty remained over the reopening of the Strait of Hormuz.
OPEC+ also approved a production-target increase of 1.88 lakh barrels per day for September, completing the rollback of its voluntary cut introduced in 2023. Actual supply, however, remains constrained by disruptions linked to the Middle East and Ukraine.
FII Activity Could Influence Market Momentum
Foreign investor positioning will remain another important market trigger. FIIs were net buyers in the Indian cash market during August, purchasing equities worth ₹2,887 crore.
The derivatives position remains more cautious. As of August 7, FIIs were net short by around 1,50,000 index-futures contracts. A reduction in these short positions could support the market through short covering, while continued positioning may limit the pace of the recovery.
Broader Markets Outperform Benchmarks
Broader market indices continued to outperform the headline benchmarks during the week. The NIFTY Midcap 150 advanced 0.9%, while the NIFTY Smallcap 250 gained 2.4%.
Among sectors, PSU Banks led with a 5% rise, followed by Defence at 4.3% and Metals at 3.7%. In contrast, the Capital Markets index declined 1.9%, Real Estate fell 1.7% and Private Banks slipped 0.5%.
Auto Stocks Remain a Bright Spot
The automobile sector remained in focus after the NIFTY Auto index gained more than 3% and closed at a record high. The sector continued to benefit from expectations around stable borrowing costs, improving consumer sentiment and festive-season demand.
July vehicle sales added to the positive momentum. Passenger-vehicle dispatches increased around 33% year-on-year to nearly 4.7 lakh units.
At the stock level, Samvardhana Motherson gained 11.8%, Ashok Leyland rose 6.8%, Sona BLW Precision advanced 6.3%, Hero MotoCorp climbed 6.3% and Mahindra & Mahindra increased 3% during the week.
Market Breadth Shows Wider Participation
Market breadth improved further, with 68% of NIFTY50 constituents trading above their 50-day moving average. The figure was 62% in the previous week, indicating wider participation in the recent recovery.
According to the market assessment provided, maintaining the breadth reading above 50% would support the existing bullish structure.
NIFTY50 Outlook: 24,774 Is the Immediate Hurdle
The NIFTY50 is holding above its 200-day exponential moving average following its recent breakout. The index is also above its 20-day and 50-day EMAs, keeping its short-term structure positive.
The ADX reading stands at 14.31, indicating that the trend is still gaining strength. The immediate resistance level is placed at 24,774.
A decisive close above 24,774 could open the way towards 25,000. On the downside, the 24,400–24,428 area is identified as the key support zone because it includes the 200-day EMA.
As long as this support zone holds, weakness could be viewed as a retest of the breakout. A close below 24,400, however, could extend the pullback towards 24,135.
What Investors Will Watch Next
The coming week is likely to be shaped by a combination of inflation data, corporate earnings, global economic indicators, oil prices and foreign investor positioning. Domestic inflation figures will provide a fresh assessment of price pressures, while U.S. data could influence global risk sentiment.
At the same time, developments surrounding U.S.-Iran negotiations and the Strait of Hormuz will remain relevant for crude prices. The interaction between oil prices, foreign flows and the NIFTY50’s technical levels could determine whether the recent recovery extends further.
Frequently Asked Questions
What are the key Indian economic data releases next week?
India’s July retail inflation data is scheduled for Wednesday, while July wholesale inflation data is due on Friday.
What are the important NIFTY50 levels to watch?
The immediate resistance is at 24,774. The key support zone is 24,400–24,428, while a close below 24,400 could expose the index to 24,135.
Disclaimer: Derivatives trading should be undertaken only by traders who fully understand the associated risks and use appropriate risk-management measures such as stop-losses. The securities and stock names mentioned are illustrative and are not recommendations. This article does not recommend any particular stock, security or trading strategy.
Source attribution: This report has been prepared solely from the market information and analysis supplied in the source material.
