Markets Ahead: Q4 Earnings, US Fed's Interest Rate Decision, And PMI Data To Impact Trading Sentiment

Market analysts point to the US Federal Reserve’s upcoming interest rate decision, scheduled for May 7, as a major global trigger that could impact market direction.

Key corporate results expected this week include earnings from M&M, Coal India, Asian Paints, Larsen & Toubro, and Titan.

Source : Freepik

The Indian equity markets are likely to experience a week of cautious optimism, with multiple domestic and global cues expected to shape investor sentiment. Market analysts point to the US Federal Reserve’s upcoming interest rate decision, scheduled for May 7, as a major global trigger that could impact market direction.

On the domestic front, traders will keep a close eye on foreign institutional investor (FII) activity and the financial performance of several high-profile companies releasing their quarterly earnings, reported PTI.

Ajit Mishra, SVP – Research at Religare Broking Ltd, noted, “This week is crucial, packed with key domestic and global triggers. Developments regarding tariff and geopolitical tensions with Pakistan will remain on the radar. On the macroeconomic front, investors would be eyeing the HSBC composite PMI and services PMI data. While on the global front, Fed interest rate decision is due on 7th May.”

Key corporate results expected this week include earnings from M&M, Coal India, Asian Paints, Larsen & Toubro, and Titan. On the macroeconomic side, investors will also track the HSBC services PMI data, which may offer insights into domestic economic momentum.

Geopolitical Risk and Market Sentiment in Focus

Tensions between India and Pakistan, particularly in the wake of the Pahalgam terror incident, have added an element of caution to market proceedings. While last week ended on a positive note—thanks to FII inflows and optimism around a possible trade deal with the US—investors remain wary due to ongoing global uncertainty.

“Concerns over a potential US recession and ongoing border tensions between India and Pakistan also weighed on market mood,” said Gaurav Garg, Analyst, Lemonn Markets Desk.

Despite recent volatility, FII participation has shown resilience. “FIIs have been sustained buyers during the last 12 trading days. This is a major pivot in FII strategy,” noted VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. He cited two major developments that contributed to this reversal: President Trump’s announcement of a 90-day pause in reciprocal tariffs, and the dollar’s weakness, which reversed the momentum trade that had previously favoured US markets. “The steep decline in the Dollar index from 111 on 11th January to 99 recently facilitated FII inflows to emerging markets, particularly India,” he added.

Amid all this, the domestic indices posted solid gains last week. The BSE benchmark surged 1,289.46 points, or 1.62 per cent, while the NSE Nifty advanced 307.35 points, or 1.27 per cent.

However, some caution persists. Vinod Nair, Head of Research at Geojit Investments Limited, said, “The recent decline in Q1 US GDP growth adds a layer of uncertainty. In this context, upcoming comments from the Federal Reserve Chair on interest rates and inflation during this week’s FOMC (Federal Open Market Committee) meeting will be closely watched and could significantly influence market direction.”

Volatility Likely, But Sentiment Stable

Despite the geopolitical backdrop and fragile global cues, analysts believe that a sharp correction is unlikely in the near term. The outlook remains positive for now, driven by FII interest and easing global trade worries.

Siddhartha Khemka, Head – Research, Wealth Management at Motilal Oswal Financial Services Ltd, remarked, “Overall, we expect the market to consolidate in a broad range with a positive bias. Stock-specific action is likely to dominate the market, although some volatility may be expected due to geopolitical tensions.”

Meanwhile, the corporate earnings season has already begun to show mixed signals. State Bank of India reported a consolidated net profit of Rs 19,600 crore for the January–March quarter, marking an 8.34 per cent decline from Rs 21,384 crore a year earlier. The fall was attributed to weaker net interest margins.

With such a mix of macroeconomic updates, geopolitical risks, and corporate earnings in play, markets are likely to tread carefully, responding to both domestic developments and global shifts.