Week Ahead: Q4 results, auto sales, India-Pak tensions, global cues among key triggers for Indian stock market

The Indian stock market extended its recovery for the second consecutive week, registering nearly a one per cent gain amid a phase of consolidation. Gains were capped by profit booking amid escalating geopolitical tensions between India and Pakistan following the Pahalgam terrorist attack.

Next, investors will monitor key market triggers in the upcoming holiday-shortened week, marking the end of the new fiscal year's first month. The next set of March quarter earnings for fiscal 2024-25 (Q4FY25), India-Pakistan geopolitical tensions, monthly auto sales, foreign capital inflows, and global cues will dictate the market direction in the coming week.

Domestic equity benchmarks Sensex and Nifty 50 rose one per cent in the last five days. The Nifty 50 and BSE Sensex advanced 0.80 per cent for the week, closing at 24,039.35 and 79,212.53, respectively. Market volatility edged higher, with the India VIX rising by 11 per cent, reversing part of the 23 per cent drop the previous week.

"The positive momentum was supported by progress in the India-US bilateral trade agreement and easing concerns over the US–China trade dispute, both of which lifted investor sentiment. Stronger-than-expected quarterly results from key banking majors contributed to the market's upward trajectory," said Puneet Singhania, Director at Master Trust Group.

The IT sector outperformed the broader index due to optimism over the US's reduction in the tariff war narrative. The broader, more domestically focused small-caps and mid-caps lost 2.5 per cent each, after investors turned risk-averse over the attack on tourists in Kashmir that killed 26 people amid heightened geopolitical tensions.

“The Indian market closed the week with marginal gains, after the sell-off towards the end of the week due to a rise in border tension between India and Pakistan. For long-term investors, it is fair to take this as an opportunity to accumulate quality stocks/sectors during further dips for the long-term gain,” said Vinod Nair, Head of Research, Geojit Investments.

This week, the primary market will witness intense action, with the first set of new initial public offerings (IPO) or listings slated across the mainboard and small and medium enterprises (SME) segments. The week will be critical from the domestic and technical points of view. Investors will track domestic and global macroeconomic data with corporate earnings.

Here are the key triggers for the Indian stock market in the coming week:

Q4 Results, Auto sales, Macro data

The upcoming holiday-shortened week sees the beginning of a new month, making monthly auto sales data a key area of focus for market participants on May 1. On the macroeconomic front, investors will track the index of industrial production (IIP) data and the HSBC Manufacturing PMI final data.

On the corporate earnings front, several prominent companies—including BPCL, IOC, Kotak Mahindra Bank, SBI, Bajaj Finance, TVS Motor, and UltraTech Cement—are set to release their quarterly results. Globally, updates related to tariffs and trade will also be watched closely.

“Weak start to Q4 results season did affect the market trend. The outlook for Q4 earnings season is muted and likely to uptick from next Q1 FY26 onwards,” said Vinod Nair of Geojit Investments.

 

IPO Action

In the coming week, Ather Energy IPO kicks off the IPO action for FY26, being the first mainboard IPO on the new fiscal 2025-26 (FY26). In the SME segment, four new issues will open for bidding this week. Among listings, shares of Tankup Engineers will get listed on either BSE SME or NSE SME.

FII Activity

Foreign portfolio investors (FPIS) turned aggressive net buyers, attracted by favourable valuations, particularly in the financial space. During the week, FPIs infused ₹17,800 crore into the cash segment, while domestic institutional investors (DIIs) added around ₹1,132 crore.

Renewed foreign institutional investor (FII) inflows bolstered the market sentiment. "Foreign investors are likely to be on a wait-and-watch approach, in the near term, to monitor the geopolitical tension," said Vinod Nair of Geojit.

“There is a distinct trend of reversal in the FII strategy in India. During the last eight days, FIIs were sustained buyers in the Indian market. The cumulative buy figure through the exchanges during these eight days is ₹32,465 crore,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

Two strong factors drive FII flows into India, despite the geopolitical tensions. One, the sustained rise in the dollar, which triggered the momentum trade towards US equities, has reversed, with the dollar index falling from a peak of 111 in mid-January this year to around 99 now.

"Two, the steep decline in US growth expected this year will impact corporate earnings in the US. At the same time, the Indian economy will remain resilient, with growth of above six per cent, accompanied by a recovery in corporate earnings," said Dr VK Vijayakumar.

According to Manoj Purohit, Partner & Leader, FS Tax, Tax & Regulatory Services, BDO India, “Foreign investors have made a notable return to Indian equity markets, emerging as net buyers over the past two weeks. In just the last seven trading sessions, FPIs have turned decisively positive on Indian equities.”

"This shift is largely attributed to a weakening US dollar, a revisit of tariff agreements, and renewed optimism surrounding India’s economic trajectory. Amid a challenging global backdrop marked by sluggish growth in major economies like the US and China, India stands out for its economic resilience," he added.

“FPI inflows are expected to remain strong in the near term, providing additional support to the ongoing market rally. As global investors reassess their strategies, India’s economic fundamentals and earnings potential position it as a beacon of stability and growth in turbulent global events.”

 

Global Cues, India-Pakistan geopolitical tensions

According to D-Street experts, global market stability, driven by ongoing discussions between the United States and its trade partners on new trade agreements, helped ease concerns about the impact of tariffs on global commerce.

However, rising geopolitical tensions between India and Pakistan, following a terrorist attack in Kashmir, sparked investor caution and led to some profit-booking. Due to the rising tensions, the market sentiment may stay cautious.

According to Vinod Nair of Geojit Investments Ltd, based on the historical performance of India, it has exhibited strong resilience during geopolitical factors, given the buoyant nature of the domestic economy.

An interesting point in this reversal of FII strategy is that it has happened at a time of heightened India-Pak tensions following the Pahalgam terror attacks," said Dr. VK Vijayakumar of Geojit Investments.

Corporate Action

Shares of HCL Tech, Tanla Platforms, 360 ONE WAM, among others, will trade ex-dividend next week, starting from Monday, April 28. Shares of some stocks will also trade ex-bonus. Check full list here

Technical View

Technically, the Nifty 50's sharp rebound over the past three weeks has been almost vertical, suggesting the possibility of some consolidation before the next major directional move. It will be crucial for the index to hold the 23,800 level to maintain its bullish bias. Read full technical analysis here

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.