Share Market Outlook: Investors Watch Inflation & FII Moves, Global Trends To Shape Market Mood

Mumbai: Indian stock markets are likely to take cues from global trends, inflation numbers, and foreign investor activity this week, according to market analysts. Other important factors include the progress of monsoon and ongoing trade discussions.

Ajit Mishra, Senior Vice President of Research at Religare Broking, said investors will be watching key economic data closely. "High-frequency data like consumer price index (CPI) inflation will help understand demand and possible moves by the central bank," he said. Monsoon progress and crop sowing patterns will also be tracked, as they affect rural demand and consumption.

RBI rate cut and global events lift sentiment

Markets ended last week on a strong note after the Reserve Bank of India (RBI) cut the repo rate by 50 basis points. This unexpected move boosted sectors that are sensitive to interest rates. On Friday, the Sensex rose by 746.95 points to close at 82,188.99, while the Nifty jumped 252.15 points to finish at 25,003.05.

Siddhartha Khemka of Motilal Oswal said markets could continue to move upward, supported by the RBI rate cut and optimism over a possible India-US trade deal. Officials from both countries are expected to meet in New Delhi to finalise the first phase of the agreement.

Global risks remain

However, analysts also warned that global issues like new US tariffs and geopolitical tensions could cause market volatility. "While the RBI's bold move and a steady GDP outlook support confidence, global uncertainties still pose a risk," said Vinod Nair of Geojit Financial Services.

Foreign Institutional Investors (FIIs) were net buyers on Friday, purchasing shares worth Rs 1,009.71 crore, according to exchange data.