Markets this week: PMI data, geopolitics & more – What will drive Dalal Street?

Indian equity markets are likely to take cues from a busy calendar of macroeconomic data, global developments and foreign investor activity in the week ahead, according to market analysts Markets are entering a data-heavy phase both in India and overseas, coinciding with the early part of the earnings season. Ajit Mishra, SVP, Research at Religare Broking Ltd, said that investors will closely monitor the final readings of the HSBC Services PMI and Composite PMI to assess domestic business conditions. “This week is expected to be data-heavy, both domestically and globally, as markets enter the early phase of the earnings season. In India, investors will track the final readings of the HSBC Services PMI (Purchasing Managers’ Index) and Composite PMI. Globally, key US macro data and releases from China will be closely watched for signals on growth, demand, and inflation trends,” Mishra said. Equities ended last week on a strong note, with the BSE benchmark rising 720.56 points, or 0.84%, while the NSE Nifty gained 286.25 points, or 1.09 per cent. The 50-share index touched a fresh all-time high of 26,340 on Friday. Attention is now expected to shift towards corporate earnings, with traders positioning selectively ahead of results from major index constituents. Ponmudi R, CEO of Enrich Money, said upcoming Services and Composite PMI data would offer further clarity on business momentum and employment trends. “Market’s focus is set to shift toward the Q3 earnings season, with traders likely to build positions selectively ahead of results from key index heavyweights. Domestically, Services and Composite PMI data will provide further insights into business momentum and employment trends…,” he said. On the global front, Ponmudi noted that US non-farm payrolls and unemployment figures would be key, as they could influence expectations around the Federal Reserve’s interest rate trajectory and overall risk appetite. While short-term volatility around major data releases cannot be ruled out, he added that the broader market structure remains positive as 2026 unfolds. The December-quarter earnings season is set to begin on January 12, with Tata Consultancy Services and HCL Technologies scheduled to announce their results. Ravi Singh, Chief Research Officer at Master Capital Services Ltd, said Indian markets appear constructively placed at the start of 2026, with domestic growth and global economic conditions shaping sentiment. “The outlook for Indian markets this week appears constructively positioned as markets enter 2026 with focus on domestic growth momentum and global economic health shaping investor sentiment for the year ahead. “While global cues particularly trends in US interest rates, currency movements, and geopolitical developments will continue to influence short-term sentiment, the primary driver for Indian markets is increasingly domestic fundamentals, including earnings visibility, government spending and consumption trends,” Singh said. Foreign Institutional Investors turned net buyers on Friday, purchasing equities worth Rs 289.80 crore, according to exchange data. Investors are also expected to keep an eye on the rupee’s movement against the US dollar and trends in Brent crude oil, the global benchmark. Vinod Nair, Head of Research at Geojit Investments Ltd, said global labour market data from the US will remain a key focus in the coming days. “For the week ahead, investors will give attention to US payroll and unemployment data for global market direction. Overall sentiment is expected to stay constructive, though markets may move within a steady range as participants wait for clearer earnings-led triggers and clarity on the India-US trade deal,” he said. Meanwhile, Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, pointed out that Indian equities have started 2026 on a strong footing, defying the usual January trend. “The Indian equity market has commenced 2026 on a stellar note, with the Nifty scaling fresh all-time high. While January has historically been a month of consolidation or bearishness, the current momentum suggests a decisive break from this seasonal trend. Supported by robust underlying factors and positive sentiment, the market structure remains firm,” Gour said.