Market outlook: US Fed meeting, Q2 earnings, trade deals likely to drive market sentiment next week

Indian equity markets face a pivotal week ahead as investors closely monitor several key factors that could sway market direction.

Decisions from the US Federal Reserve meeting, quarterly corporate earnings, India’s industrial output (IIP) data, and updates on US-China and US-India trade negotiations are expected to dominate market sentiment.

The US Federal Reserve’s policy announcement on October 28–29 will garner significant attention. Market participants anticipate a potential interest rate cut, which could provide momentum to domestic and global equities.

Major quarterly earnings releases include Indian Oil, TVS Motor Company, L&T, Hindustan Petroleum, ITC, Cipla, Dabur India, Maruti Suzuki India, Bharat Electronics Limited (BEL), and ACC.

Progress in trade negotiations between the US, China, and India remains under investor scrutiny, with potential market volatility tied to breakthrough developments.

Markets ended marginally higher in the previous trading week. The Nifty advanced 85.30 points (0.33%) to close at 25,795.15, while the Sensex gained 259.69 points (0.31%) to settle at 84,211.88.

Sectoral performance showed mixed trends. Nifty IT led gains (up 2.96%), followed by PSU Bank (2.34%), Pharma (0.47%), Metal (1.45%), Realty (0.77%), Energy (0.65%), and Media (1.35%). Auto, Financial Services, and FMCG sectors declined between 0.44-0.52%.

Broader market indices also witnessed upside momentum. The Nifty Midcap 100 rose 328.95 points (0.56%) to 59,231.20, while the Nifty Smallcap 100 climbed 130.95 points (0.72%) to close at 18,253.35.

Technical indicators suggest sustained bullish sentiment as Nifty continues trading above its 20-day, 50-day, and 200-day exponential moving averages. The weekly Relative Strength Index (RSI) reading of 61.60 indicates neutral-to-positive momentum, with traders watching for consolidation breakout signals.

Key support levels for Nifty are seen at 25,670, with potential downside targets at 25,500 and 25,400 if breached. Immediate resistance is positioned near 25,950-26,100 levels.

(With inputs from IANS)