Markets Ahead: Indo-Pak Tensions, Tariff Developments, And PMI Data To Influence Sentiment

Analysts say that movement in equities will be influenced by the situation between India and Pakistan, especially following the tragic terror attack at Pahalgam in J&K that claimed 26 lives.

Equity markets will remain closed on Thursday in observance of 'Maharashtra Day'.

Source : Freepik

Indian stock markets are gearing up for a volatile, holiday-shortened week, with geopolitical developments, corporate earnings, and macroeconomic data likely to dictate investor sentiment. Analysts say that movement in equities will be influenced by the situation between India and Pakistan, especially following the tragic terror attack at Pahalgam in Jammu and Kashmir that claimed 26 lives. In addition, foreign investor activity and global market trends will also be critical factors to watch.

Equity markets will remain closed on Thursday in observance of 'Maharashtra Day'. Market participants are expected to monitor updates related to tariffs closely, while the onset of a new month brings auto sales figures into focus, reported PTI.

Meanwhile, investors will be keeping an eye on macroeconomic indicators such as the Index of Industrial Production (IIP) and the HSBC Manufacturing PMI.

Corporate Earnings and FII Activity in Focus

A host of corporate earnings announcements are lined up this week. Companies like BPCL, IOC, Bajaj Finance, TVS Motor, and UltraTech Cement are among those scheduled to report their quarterly results. Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, "Geopolitical developments between India and Pakistan could add volatility to the Indian market over the next few days. Meanwhile, stock/sector specific action would continue on the back of ongoing Q4 earnings announcements. Key results this week include those from largecaps like Ultratech Cement, Bajaj Finance, Trent, Ambuja Cements amongst others."

Reliance Industries Ltd also reported a 2.4 per cent increase in its March quarter net profit. Store rationalisation in the retail segment and better margins in telecom managed to offset weaknesses in its oil and petrochemical businesses. The company's consolidated net profit stood at Rs 19,407 crore, or Rs 14.34 per share, for the January-March quarter of FY25, up from Rs 18,951 crore, or Rs 14 per share, in the same period last year.

Despite geopolitical tensions weighing on sentiment, Indian equities showed resilience last week. The BSE Sensex rose by 659.33 points or 0.83 per cent, while the NSE Nifty gained 187.7 points or 0.78 per cent. However, Friday's session saw heavy profit-taking, with the Sensex plunging 588.90 points or 0.74 per cent to 79,212.53, and the Nifty declining by 207.35 points or 0.86 per cent to 24,039.35.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, pointed out, "There is a distinct trend reversal in FII strategy in India. During the last eight days FIIs (Foreign Institutional Investors) were sustained buyers in the Indian market." He further observed, "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."

Global and Domestic Data to Shape Sentiment

Looking ahead, the release of Industrial Production (YoY) data for March on April 28 is expected to offer vital clues about the strength of India's manufacturing and industrial sectors, according to Bajaj Broking Research. Globally, investors will also track tariff and trade developments that could add another layer of uncertainty to market movements between April 28 and May 2.