Dalal Street This Week: FOMC minutes, India-US trade deal progress, PMI data among 10 key factors to watch

The market participants will keep a close watch on the progress of India-US trade deal negotiations as this is the important factor for the equity market to get into new leg of upmove

The market made a strong comeback in the week ended November 14, rising over 1.6 percent after weakness in the previous two weeks.

Resolution of the US government shutdown, better-than-expected September quarter earnings, easing inflation and strong mandate for NDA government in Bihar elections lifted market sentiment, though fading expectations of a US Fed rate cut triggered profit booking in IT stocks.

This week, the market is expected to remain in positive terrain with focus on the progress in India-US trade talks, FOMC minutes, FIIs' mood, PMI numbers and US jobs data.

The Nifty 50 rallied 418 points (1.64 percent) during the week to 25,910, and the BSE Sensex surged 1,347 points (1.62 percent) to 84,563, while the Nifty Midcap 100 index ended at a new closing high of 60,739, up 1.5 percent, and the Smallcap 100 index rose 1 percent to 18,252.

According to Vinod Nair, Head of Research at Geojit Investments, the market direction will hinge on key macro triggers such as India’s PMI data, US jobless claims, FOMC minutes, and progress on US–India trade negotiations.

"With the retail inflation easing and the corporate earnings season concluding on a positive note, the backdrop remains supportive for Indian equities," said Siddhartha Khemka - Head of Research, Wealth Management at Motilal Oswal Financial Services.

He expects the markets to stay firm, with a potential India–US trade deal announcement offering scope for a sharper up-move.

A prudent approach would be to focus on sectors with strong fundamentals, clear earnings visibility, and structural tailwinds, positioning portfolios for potential upgrades in H2FY26, Vinod Nair advised.

The market participants will keep a close watch on the progress of India-US trade deal negotiations as this is an important factor for the equity market to get into a new leg of upmove. Most experts expect the Trump administration to either remove the additional 25 percent tariff imposed due to Russian oil imports or cut down the tariff to 15-20 percent from 50 percent now.

Earlier in the week, US President Donald Trump stated that Washington is planning to “bring down the tariffs” imposed on New Delhi. "Well, right now, the tariffs are very high on India because of the Russian oil, and they've stopped doing the Russian oil. It's been reduced very substantially. Yeah, we're going to be bringing the tariffs down... At some point, we're going to be bringing them down," he said while responding to a question about the progress of the trade deal and the possibility of lowering tariff rates.

"If trade negotiations with the US are finalised, it could provide a significant boost to investor sentiment and FIIs may once again turn positive for the Indian markets," Raghvendra Nath of Ladderup Asset Managers.

On Friday, US President Donald Trump has announced easing import duties on nearly 200 food, farm and agricultural goods, which resulted into a benefit for Indian spice traders and tea growers.

Investors globally will keep an eye on the minutes of the Federal Reserve's policy meeting held during October 28-29. The Federal Open Market Committee (FOMC) slashed the federal funds rate by 25 bps to the range of 3.75-4.00 percent in its October policy meeting, following 25 bps cut in September meeting but Chair Jerome Powell commentary signalled low possibility of rate cut in December meeting.

In fact, the several policymakers expressed doubts about the need for another rate cut this year, suggesting that maintaining current rates may be necessary to balance persistent inflation pressures against emerging signs of labour-market softening, said Kaynat Chainwala of Kotak Securities.

Cleveland Fed President Beth Hammack and St. Louis Fed President Alberto Musalem both argued for keeping policy restrictive, with Musalem noting that rates are already close to neutral, leaving limited room for further cuts. Kansas City Fed President Jeffrey Schmid echoed similar concerns, warning that inflation remains "too hot" and signaling he may oppose any December rate reduction.

Further, the speeches by several Fed officials scheduled this week will also be watched, along with the jobs data and Michigan inflation expectations final numbers for November.

Apart from FOMC minutes and US jobs data, globally the focus would be on the manufacturing & services PMI flash data for November from several nations, including the United States, Japan, the UK, as well as the Euro Zone.

Further, preliminary estimates for Q3-CY25 GDP growth numbers and inflation for October by Japan, as well as retail sales and inflation data for October by the UK, will also be watched this week. Europe will also announce its inflation numbers for October.

Back home, the market participants will focus the unemployment rate (which was at 5.2 percent in September) and balance of trade data for October due on November 17, followed by infrastructure output for October due on November 20.

Further, HSBC Manufacturing and Services PMI flash numbers for current month, and foreign exchange reserves for week ended November 14 will be released on November 21. The manufacturing PMI climbed to 59.2 in October against 57.7 in September, however, in the same period, services PMI dropped to 58.9, compared to 60.9.

The mood at the Foreign Institutional Investors (FIIs) desk will also be watched as their selling in Indian markets accelerated last week, which capped the major upside in the equities, though Domestic Institutional Investors (DIIs) remained strong buyers, providing strong support to the market to drive near record high zone.

FIIs have net sold Rs 12,020 crore worth shares in the week gone by, taking the total current month's outflow to Rs 13,657 crore, but DIIs compensated the FII outflow by significant margin, buying Rs 24,674 crore worth shares during the week and Rs 41,352 crore in current month, as per provisional data. According to experts, the ongoing AI trade in countries like US, China, Taiwan and South Korea may be attracting FIIs, hence there could be selling in India but that is expected to reverse once the AI theme starts losing the steam.

Meanwhile, the Indian rupee has been rangebound especially after hitting record low of 88.87 against the US dollar in September. The currency could not see this level for last two months, closing the week at 88.64, weakening 0.01 percent and forming Doji candlestick pattern on the weekly charts, indicating indecision among bulls and bears.

The US dollar index fell for another week, down 0.28 percent to 99.27 amid the end of longest US shutdown and expectations of fed funds rate cut in December faded (following a series of hawkish comments from Fed officials). It sustained below 100 mark since second half of May this year.

The primary market will see some slowdown in new IPO launches compared to previous weeks, as only two new public issues - one each from the mainboard and SME segments - will be opened for subscription this week on November 19. Both will close on November 21.

Excelsoft Technologies, the SaaS company specialising in the learning and assessment market, is raising Rs 500-crore via offer, with a price band of Rs 114-120 per share, while in the SME segment, Gallard Steel aims to mobilise Rs 37.5 crore via a public issue of 25 lakh shares at the upper end of price band of Rs 142-150 per share.

Further, Fujiyama Power Systems will close its Rs 828-crore IPO on November 17, followed by Capillary Technologies India's offer on November 18.

On the listing front, PhysicsWallah, and Emmvee Photovoltaic Power will make its market debut on November 18, followed by Tenneco Clean Air India on November 19, Fujiyama Power Systems on November 20, and Capillary Technologies India on November 21.

In the SME segment, Workmates Core2Cloud Solution, as well as Mahamaya Lifesciences will list their shares on the BSE SME on November 18.

Technically, the Nifty 50 remained strong despite correction in previous two weeks, forming long bullish candle with upper & lower shadows on the weekly timeframe with above-average volumes, and sustaining above all key moving averages as well as the midline of Bollinger bands. The RSI climbed above 60 to 61.38 with positive crossover, while the MACD maintained bullish crossover with strength in histogram. Closing and sustaining above 26,000 is expected to open door for 26,100 and 26,300 levels, while the support is placed at 25,700, followed by 25,450 being crucial support, experts said.

According to the weekly options data, the 26,000 is the crucial resistance zone for the Nifty 50 to make a move toward 26,200-26,300, with 25,700 being immediate support zone followed by 25,500 being crucial support.

On the Call side, the maximum open interest was placed at the 26,000 strike, followed by the 26,500, and 26,200 strikes (91.6 lakh contracts), with the maximum Call writing at the 26,000, 25,800 and 26,300 strikes. On the Put side, the 25,500 strike holds the maximum Put open interest, followed by the 25,800 and 25,700 strikes, with the maximum Put writing at the 25,700, 25,750 and 25,600 strikes.

The volatility index - India VIX, also known as fear gauge, remained supportive for bulls after falling below 12 zone to 11.94, down 4.94 percent for the week after rising 4 out of previous five consecutive weeks. It touched 13 level during the week, but could not sustain the same on closing basis, giving comfort for bulls. As long as it stays below this zone, the bulls may remain in their comfort zone.