Dalal Street This Week: Q2 Earnings, FOMC, ECB, BoJ, US-China meet among 10 key factors to watch

Dalal Street Week Ahead

The market continued its upward journey for the fourth consecutive week, ending October 24, though there was profit booking-led selling pressure in the last couple of sessions from their fresh 52-week highs.

Geopolitical tensions and spike in oil prices (up 7.6 percent for the week after consistent downtrend in previous three weeks) with fresh sanctions from the US and European Union on Russian oil majors, and renewed inflation concerns weighed on sentiment, but upbeat consumer sentiment post record festive sales, and hope for India-US trade deal and improvement in earnings growth in the quarters ahead supported the market.

In the week starting October 27, the market is expected to be rangebound and consolidative with focus on further corporate earnings, central banks meetings (FOMC, ECB, and BoJ), monthly auto sales numbers, further developments with respect to India-US trade deal talks and US shutdown, and the scheduled meeting between US and Chinese Presidents in South Korea on October 30.

The Nifty 50 rose 85 points (0.33 percent) to 25,795, and the BSE Sensex climbed 260 points (0.31 percent) to 84,212, while the Nifty Midcap and Smallcap 100 indices gained 0.56 percent and 0.72 percent, respectively.

Overall, Siddhartha Khemka - Head of Research, Wealth Management at Motilal Oswal Financial Services expects Indian equities to remain range-bound, tracking global cues, upcoming Q2 results and macro-economic data.

"FII inflows and upbeat management commentaries could help sustain positive market momentum, though intermittent profit booking cannot be ruled out," he said.

According to Vinod Nair, Head of Research at Geojit Investments, investors remain watchful of developments in the India-US trade negotiations, as both sides edge closer to finalizing a deal.

"Global market sentiment will largely hinge on key interest rate decisions from the FED & ECB by this week, which are expected to influence market direction in the near term," he said.

Meanwhile, the precious metals market faced extreme volatility, with COMEX gold futures declining 1.79 percent during the week to $4,137.8 per ounce (after hitting a record high of $4,398), driven by profit booking and a strengthening USD. COMEX silver futures dropped 3.03 percent for the week to $48.58 per ounce.

Here are 10 key factors to watch this week:

September Quarter Earnings

The corporate earnings season will be in full swing this week as more than 300 companies will be releasing their numbers. This includes the Nifty 50 names like Coal India, Larsen & Toubro, Cipla, ITC, Maruti Suzuki India, and Shriram Finance.

Other important companies like Shree Cement, Tata Capital, PB Fintech, Swiggy, Urban Company, Canara HSBC Life Insurance Company, Canara Robeco Asset Management Company, Indus Towers, Indian Oil Corporation, Hindustan Petroleum Corporation, Bharat Petroleum Corporation, PNB Housing Finance, CarTrade Tech, Jindal Steel, Mahindra & Mahindra Financial Services, Premier Energies, TVS Motor Company, BHEL, LIC Housing Finance, Mahanagar Gas, NTPC Green Energy, United Breweries, Varun Beverages, Adani Power, Bandhan Bank, Canara Bank, Dabur India, DLF, Hyundai Motor India, Indian Energy Exchange, Manappuram Finance, NTPC, Union Bank of India, United Spirits, ACC, Bank of Baroda, Bharat Electronics, Gail (India), Godrej Consumer Products, Sammaan Capital, and Tata Chemicals will also announce their quarterly earnings this week.

Fed Interest Rate Decision

Globally, the market participants will focus on the interest rate decision by the US Federal Open Market Committee (FOMC), and then the commentary by Chair Jerome Powell with respect to jobs data and economic growth on October 29. Most economists expect the central bank to reduce its benchmark interest rate by 25 bps to a range of 3.75-4.00 percent in the October meeting, following a 25 bps cut in the September meeting as Fed officials are more concerned about the jobs market health, while the inflation sustains above its target of 2 percent.

Apart from that, there is a further update regarding the US government shutdown, which has now continued for 26 days with no resolution in sight. The Senate adjourned last Thursday (October 23) and won't return until Monday afternoon (October 27), meaning the impasse is all but certain to stretch into this week. The upper chamber has failed to advance a GOP funding bill 12 times, most recently on Wednesday (October 22). More than 40 million Americans are at risk of going without food assistance benefits at the end of the month if the shutdown continues. CBS News Reported.

As a result, there will be no announcement of several important economic data points like advance estimates for Q3-2025 GDP growth, PCE prices, and real consumer spending.

The meeting between US President Donald Trump and Chinese counterpart Xi Jinping in South Korea, scheduled on October 3,0 will also be watched.

ECB & BoJ Interest Rate Decision

Furthermore, the interest rate decisions by the European Central Bank (ECB) and the Bank of Japan will also be announced this week, on October 30. Both central banks are expected to keep their interest rates unchanged at 2.00 percent and 0.5 percent, respectively, according to most economists.

Global Economic Data

Apart from central banks' meetings, Europe's GDP growth flash numbers for Q3-2025, unemployment rate for September, and consumer inflation & selling price expectations for October month scheduled on October 30 and will also be watched this week.

On October 31, the focus will be on the Europe's inflation flash numbers for October month, and Japan's unemployment rate, jobs/applications ratio, retail sales, housing starts, and construction orders for September.

Domestic Economic Data and Auto Sales

Back home, the industrial and manufacturing production numbers for September month will be released on October 28, while fiscal deficit data for the month of September will be announced on October 31.

On the same day, bank loan & deposit growth for the fortnight ended October 17, and foreign exchange reserves for the week ended October 24 will also be released.

Further, the focus will also be on the auto sales data for October, which is scheduled for release in the initial days of November (mostly over the next weekend). Hence, the action will also be seen in auto stocks ahead of these numbers.

FII Flow

The market participants will also keep an eye on the mood of institutional investors as FIIs (Foreign Institutional Investors) have gradually been providing some support to the Indian equities for the last three weeks, especially after a significant sell-off in recent months. They have net bought Rs 343 crore worth shares in the week gone by, which resulted in the minor selling of Rs 244 crore for the current month, against significant offloading in the past three months.

The declining valuation, strong festive demand, and rising hope for strong earnings growth in the coming quarters and India-US trade deal sooner than later are some of the reasons for renewed FIIs buying interest.

DIIs (Domestic Institutional Investors) remained net buyers during the week, acquiring Rs 5,945.3 crore worth of shares, taking the total inflow to Rs 33,990 crore for the current month.

Meanwhile, the Indian rupee strengthened for the second consecutive week, rising 0.18 percent during the week to 87.80 against the US dollar, while the US dollar index remained rangebound for another session and hovered around short-term moving averages for several weeks now, closing 0.40 percent higher at 98.938.

IPO

The action will be back in the primary market after a quiet period for the last couple of weeks, with five new initial public offerings (IPOs) hitting Dalal Street this week. This includes three mainboard public issues.

Norway parent-backed spices and convenience foods maker Orkla India will launch its Rs 1,667.5-crore IPO for subscription on October 29 with a price band of Rs 695-730 per share, followed by helmet maker Studds Accessories and eyewear company Lenskart Solutions IPOs, which will be opened on October 30 and October 31, respectively.

The other two public issues - Jayesh Logistics and Game Changers Texfab - will be from the SME segment. Logistics solutions provider Jayesh Logistics will launch its Rs 28.63-crore IPO on October 27, while the Rs 55-crore initial share sale of fabrics supplier Game Changers Texfab is scheduled to open on October 28.

Technical View

Technically, the sentiment turned a bit cautious after losing over 300 points from Thursday's high of 26,104 due to profit booking and forming a Shooting Star-like candlestick pattern on the weekly charts, especially after three green candles in the past three weeks. This is generally a bearish reversal pattern but confirmation is needed to validate any reversal signal. This profit taking came after the index rising over 1,500 points since the start of the current month, but overall, the trend remains in favour of bulls with the weekly RSI climbing to 61.6 and the MACD sustained bullish crossover with rising histogram.

Even the Stochastic RSI looked strong. Hence, as long as the index defends 25,700-25,500, the key support zone, the possibility of rebound toward 26,100 and then 26,277 (record high) is high in the upcoming sessions; however, falling decisively below the support can open the door for 25,200-25,000 on the lower side, experts said.

F&O Cues

The monthly options data indicated the Nifty 50 may trade in the 25,500-26,500 range in the short term as breaking of the zone on either side can give firm direction, while some volatility can be seen as the October derivative contracts are scheduled for expiry on October 28.

The 26,500 strike holds the maximum Call open interest, followed by the 26,000 and 26,200 strikes, with the maximum Call writing at the 26,000, 25,900 and 25,800 strikes, while the maximum Put open interest was seen at the 25,500 strike, followed by the 25,700 and 25,800 strikes, with the maximum Put writing at the 25,700, 25,500, and 25,750 strikes.

Meanwhile, the India VIX, the fear index, dropped 0.3 percent for the week to 11.59 after a sharp 15.07 percent increase in the previous week, which is still favourable for bulls. The discomfort for bulls is possible only if the VIX climbs and sustains above the 13 mark.

Corporate Action

Here are key corporate actions taking place this week:

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