Market outlook: India-US trade deal, Q1 FY26 earnings key drivers this week
After witnessing a phase of profit booking last week, considering the broader indices currently trading at elevated levels, the market participants will closely watch for signs of earnings catch-up from upcoming Q1 — starting next week -- along with the outcome of the interim Indian-US trade deal before the July 9 deadline, analysts said on Sunday.
Additionally, the OPEC+ meeting scheduled for this weekend could influence global oil prices.
“On the macroeconomic front, the broader economy stands to benefit from favourable conditions such as easing inflation and declining interest rates. A positive outcome from the US-India trade negotiations could further lift market sentiment, particularly benefiting trade-sensitive sectors like IT, pharma, and auto,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Markets ended last week on a positive note despite a largely rangebound trading environment. The Nifty closed at 25,461, up 55.7 points, while the Sensex added 193 points to end at 83,432.
The broader market saw support from key sectors like banking, pharma, IT, realty, oil and gas, and media, which posted gains between 0.4 per cent and 1 per cent.
However, metals, telecom, and auto stocks underperformed, limiting the overall upside.
“Investor sentiment remains cautiously optimistic ahead of the anticipated US-India trade agreement, with the tariff deadline drawing closer. A favourable outcome from the talks could act as a major trigger for the next phase of the rally, especially given the recent lack of directional momentum. This event is being closely tracked by institutional participants and could determine the near-term trend,” according to a note by Choice Broking.
As per Fibonacci extension, the next major upside targets are seen at 27,300 and 28,600. On the downside, key supports are placed at 25,000 and 24,500, where buying interest is likely to emerge, it added.
Meanwhile, the Bank Nifty index closed at 57,031.90 last week, registering a 0.72 per cent decline from the previous week's close.
The weekly chart indicates rejection at higher levels; however, the index has managed to hold above the crucial 57,000 mark. The selling pressure at higher levels suggests a potential pause in the ongoing uptrend, indicating a likely sideways phase in the near term, said the Choice Broking note.
For the ongoing expiry, put options show the highest concentration near the 57,000 and 56,500 strikes, marking these as key support levels. Conversely, significant open interest in call options at 57,000 and 57,500 indicates potential resistance, suggesting a likely trading range of 56,500–57,500 in the upcoming sessions, said analysts.
FIIs have turned cautious amid elevated market valuations and mixed global cues, while DIIs continue to provide support, helping stabilise sentiment.
