Q2 Earnings, Inflation And Oil Prices In Focus, Know- Will Nifty Extend Its Recovery This Week?

New Delhi: Indian stock markets are likely to remain volatile this week as investors track September quarter earnings, inflation data, crude oil prices and global developments, analysts said.

Results from major IT companies, including Wipro, HCL Technologies and Tech Mahindra, will be closely watched after better-than-expected earnings from Tata Consultancy Services (TCS) helped markets recover last week.

Inflation Data To Test Market Sentiment

September consumer price inflation (CPI) and wholesale price inflation (WPI) figures will be crucial in determining market direction.

Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, said higher-than-expected inflation could revive concerns over further Reserve Bank of India (RBI) rate hikes.

Banking, automobiles and real estate stocks could face pressure if inflation remains elevated.

However, softer inflation may provide temporary relief, particularly if Brent crude continues trading above USD 100 per barrel.

IT Earnings Take Centre Stage

The September quarter earnings season will gather momentum with results from HCL Technologies, Wipro and Tech Mahindra.

Other companies scheduled to announce earnings include BHEL, Canara Bank, HDB Financial Services, HDFC Asset Management Company and Nestle.

IT stocks witnessed strong buying on Friday after TCS shares rallied over 4 per cent following better-than-expected quarterly results.

Analysts believe earnings guidance and management commentary will determine whether the sector's recovery continues.

Crude Oil And FII Selling Remain Risks

Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services, expects Indian equities to consolidate amid improving corporate earnings and persistent global uncertainties.

Brent crude above USD 100 per barrel and sustained foreign institutional investor (FII) selling remain major concerns.

Ponmudi R, CEO of Enrich Money, said geopolitical tensions involving Iran and the Strait of Hormuz continue to threaten global energy supplies.

Global Cues, Nifty Recovery In Focus

Investors will also monitor US inflation, employment data, Treasury yields, dollar movements and rupee trends.

After eight consecutive weekly declines, the Nifty gained 0.43 per cent last week, signalling some stabilisation.

The Sensex rose 562.63 points, or 0.78 per cent, while the Nifty advanced 98.5 points.

Analysts expect stock-specific movements as earnings announcements gather pace.