Markets Poised for Directional Break as Q1 Earnings, US-India Trade Deal Take Center Stage
After a phase of profit booking in the previous week, Indian equities are expected to enter a pivotal period, with investors keenly eyeing the upcoming Q1 earnings season and the outcome of the interim US-India trade deal ahead of the July 9 deadline, analysts said on Sunday.
Additionally, global market sentiment may be swayed by the upcoming OPEC meeting, which could influence international crude oil prices.
“Macroeconomic fundamentals remain constructive, with declining inflation and interest rates creating a supportive backdrop for growth. A positive resolution in the US-India trade talks could further bolster sentiment, especially for trade-sensitive sectors such as IT, pharma, and auto,” said Vinod Nair, Head of Research at Geojit Financial Services.
Despite rangebound trading conditions, Indian indices closed last week on a firm note. The Nifty 50 ended at 25,461, gaining 55.7 points, while the Sensex rose 193 points to settle at 83,432.
Sector-wise, the rally was underpinned by gains in banking, pharma, IT, realty, oil & gas, and media stocks, which rose between 0.4% and 1%. However, metal, telecom, and auto sectors underperformed, curbing broader market momentum.
According to analysts at Choice Broking, investor sentiment remains “cautiously optimistic,” with the pending US-India trade agreement acting as a critical near-term catalyst. “A favourable outcome could serve as a trigger for the next leg of the rally, especially as markets have lacked strong directional cues in recent sessions. Institutional investors are closely tracking this development,” the firm noted.
Technical indicators suggest key upside levels for Nifty at 27,300 and 28,600, based on Fibonacci extensions. On the downside, support is seen at 25,000 and 24,500 — levels where buying interest may likely resurface.
Meanwhile, the Bank Nifty closed the week at 57,031.90, down 0.72% from the previous week. Despite some rejection at higher levels on the weekly chart, the index continues to hold above the key 57,000 level. Analysts suggest this may signal a consolidation phase in the near term.
In the derivatives segment, significant open interest in put options at 57,000 and 56,500 indicates strong support levels, while call options concentrated at 57,000 and 57,500 suggest potential resistance. This sets up a likely trading range between 56,500 and 57,500 in the coming sessions.
Foreign Institutional Investors (FIIs) remain cautious amid stretched valuations and global uncertainty, while Domestic Institutional Investors (DIIs) continue to lend support, contributing to overall market stability.
