Indian Stock Market: Domestic Data, US Fed Minutes & Trade Deal to Guide Direction

Economy

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Updated on 16 Nov 2025, 09:51 am

India's equity markets are expected to be guided by a combination of domestic macroeconomic data, the minutes from the US Federal Reserve's latest meeting, and updates on the India-US trade deal.

Analysts also noted that foreign investor activity will continue to play a significant role in shaping market sentiment. Vinod Nair, head of research at Geojit Investments Ltd, indicated that the market's next move will largely depend on indicators such as India’s Purchasing Managers' Index (PMI) numbers, US jobless claims, FOMC minutes, and negotiations on the trade pact with the US.

Nair advised investors to focus on sectors with solid fundamentals and clear earnings visibility to position themselves for potential upgrades in the second half of Fiscal Year 26 (FY26).

Last week, benchmark indices showed strong gains, with the Sensex rising 1.62% and the Nifty advancing 1.64%. These gains were attributed to the resolution of the US government shutdown, stable domestic fundamentals, better-than-expected Q2 results, and cooling inflation.

Siddhartha Khemka, head of research (wealth management) at Motilal Oswal Financial Services, stated that capital-market-linked stocks remained active due to robust retail participation, strong Systematic Investment Plan (SIP) inflows, and interest in both recent and upcoming Initial Public Offerings (IPOs).

Khemka anticipates Indian equities to maintain their upward trend, supported by healthy earnings and political stability. Attention will now shift towards broader domestic cues, including demand signals from the festive and wedding season, the interest rate outlook, and the possibility of higher government spending in the latter half of the fiscal year. The reopening of the US government and improving global risk appetite add to the supportive backdrop, with sectors like IT, metals, and capital-market-linked names likely to come into focus.

Ajit Mishra, SVP – research at Religare Broking Ltd, mentioned that markets staged a sharp rebound last week. Investor confidence improved significantly after India’s retail inflation eased to 0.25% in October from 1.44% in September, driven by GST cuts and softer food prices. With earnings announcements concluded, the focus will turn to high-frequency indicators, including Services PMI, forex reserves, and infrastructure output. Globally, market mood will be shaped by key US data releases, the FOMC minutes, and volatility in AI-linked stocks.

Last week's trading saw Sensex and Nifty closing marginally higher on Friday after recovering from early losses. Gains in banking, Fast-Moving Consumer Goods (FMCG), and telecom stocks supported the market, while sectors such as IT, auto, and metals closed lower. Investors remained cautious ahead of the Reserve Bank of India (RBI) policy meeting and US Fed cues.

Impact This news provides investors with key domestic and global factors to monitor, influencing short-to-medium term market direction. Expert advice suggests a focus on fundamental strength, potentially guiding investment decisions towards specific sectors. The overall sentiment appears cautiously optimistic. Rating: 7/10

Difficult Terms: Macro data: Large-scale economic data that reflects the overall condition of an economy, such as inflation, GDP, and employment figures. US Federal Reserve: The central banking system of the United States, responsible for monetary policy. FOMC minutes: The official record of the meetings of the Federal Open Market Committee, which sets US monetary policy. Trade pact: An agreement between two or more countries to reduce barriers to trade. PMI numbers: Purchasing Managers' Index, a survey of purchasing managers in the manufacturing and service sectors, used as an indicator of economic health. Jobless claims: Reports on the number of people filing for unemployment benefits, indicating the health of the labor market. FY26: Fiscal Year 2026. Benchmark indices: Stock market indices (like Sensex and Nifty) that represent the performance of a broad segment of the market. Q2 results: Results for the second quarter of the financial year. SIP inflows: Systematic Investment Plan, a method of investing a fixed amount regularly in mutual funds, and inflows refer to the money coming into these plans. IPOs: Initial Public Offerings, where a private company offers its shares to the public for the first time. FMCG: Fast-Moving Consumer Goods, products that are sold quickly and at relatively low cost. RBI policy meeting: The meeting of the Reserve Bank of India's Monetary Policy Committee to decide on interest rates and other monetary measures. US Fed cues: Signals or indications from the US Federal Reserve regarding its future monetary policy decisions. Services PMI: Purchasing Managers' Index for the services sector. Forex reserves: Foreign exchange reserves, holdings of foreign currencies by a central bank. Infrastructure output: Measures the growth of core infrastructure industries like cement, steel, electricity, etc. AI-linked stocks: Stocks of companies involved in Artificial Intelligence technology.