Q2 GDP Data & Global Cues To Steer Markets This Week, Investors Expected To Stay Selective Amid Mixed Signals

Mumbai: Indian equity markets are likely to take direction this week from a combination of key domestic data releases—most importantly the second-quarter (Q2 FY26) GDP numbers—and global cues. Analysts expect investor sentiment to remain sensitive to developments around the India-US trade discussions, industrial production (IIP) data and foreign institutional investors’ (FIIs) activity.

Religare Broking’s Ajit Mishra said that with macro indicators turning mixed and global trends offering limited clarity, investors should adopt a measured approach. He suggested prioritising sectors showing steady earnings momentum, including banking, auto, IT and consumption, while maintaining selectivity in other segments. He also advised caution around derivatives expiry and major data releases, recommending a buy-on-dips strategy only near strong support zones.

Technical Setup Remains Bullish

The Nifty closed decisively above the 26,000 mark last week, signalling sustained strength and rising buying interest at higher levels. According to Amruta Shinde of Choice Broking, the index continues to trade comfortably above its 20-day, 50-day and 200-day exponential moving averages, reinforcing a broader bullish undertone. As long as Nifty stays above these averages, sentiment is expected to remain positive and forward-leaning.

The benchmark indices ended the previous week with gains of 0.68 percent for Nifty and 0.50 percent for Sensex, supported by robust Q2 earnings, easing inflation pressures and optimism surrounding ongoing India-US trade talks.

Broader Markets Lag; Sector Trends Diverge

While headline indices advanced, broader markets underperformed. The Nifty Midcap100 fell 0.76%, and the Smallcap100 declined 2.2% over the week. IT stocks, despite facing selling pressure due to weakness in US tech counters, emerged as the top weekly gainer. Auto and Services indices also posted strong gains.

Analysts cautioned that persistent pressure on the Indian rupee could trigger bouts of profit booking. Market participants will closely track this week’s trade data, IIP figures and Q2 GDP release to gauge the near-term direction.