Key drivers for the week: India-US trade deal outlook and Q1 FY26 earnings

Market analysts are emphasizing the impact of upcoming events on the Indian stock market this week. After a period of profit-taking, market participants are keenly awaiting the Q1 earnings reports set to begin next week. Additionally, the outcome of the interim India-US trade deal, which must be finalized before the July 9 deadline, is another crucial factor that could influence market sentiment.

The OPEC meeting scheduled for the weekend could also play a significant role in determining global oil prices, adding to the list of events that investors are closely monitoring. Vinod Nair, Head of Research at Geojit Investments Limited, pointed out that the broader economy could benefit from favorable conditions such as easing inflation and declining interest rates. He also mentioned that a positive outcome from the US-India trade negotiations could further boost market sentiment, particularly benefiting trade-sensitive sectors like IT, pharma, and auto industries.

Despite the market trading at elevated levels, last week ended on a positive note with the Nifty closing at 25,461, marking a gain of 55.7 points, and the Sensex ending at 83,432 after adding 193 points. Key sectors such as banking, pharma, IT, realty, oil and gas, and media posted gains between 0.4 to 1 percent. However, underperforming sectors like metals, telecom, and auto stocks limited the overall upside potential.

Investor sentiment appears cautiously optimistic, awaiting the outcome of the anticipated US-India trade agreement as the tariff deadline approaches. A positive resolution could serve as a significant trigger for the market, especially due to the recent lack of directional momentum. Financial analysts are closely tracking this event as it could determine the near-term trend in the market.

Technical analysis suggests that the next major upside targets are seen at 27,300 and 28,600, with key support levels at 25,000 and 24,500. The Bank Nifty index closed at 57,031.90 last week, indicating a 0.72 percent decline from the previous week. While the index has managed to hold above the crucial 57,000 mark, selling pressure at higher levels indicates a potential pause in the uptrend.

For the ongoing expiry, key support levels are identified at 57,000 and 56,500 strikes, while potential resistance levels are observed at 57,000 and 57,500. This suggests a likely trading range of 56,500–57,500 in the upcoming sessions. Overall, FIIs are exhibiting caution due to high market valuations and mixed global cues, while DIIs continue to provide support and stabilize market sentiment.