Dalal Street This Week: Q1 results, RBI policy, Trump tariff updates among 10 key factors to watch

The Nifty 50 fell 1.09 percent to 24,565, and the BSE Sensex declined 1.06 percent to 80,600, taking the total loss in the last five straight weeks to over 4 percent.

The market corrected little more than 1 percent last week, ending August 1, with the Nifty 50 still holding its crucial 24,500 support, extending the downtrend for the fifth consecutive week following tariffs on India, a revision in tariff rates on several trade partners by the US, and mixed Q1FY26 earnings scorecard. The consistent selling pressure from FIIs, hawkish signals from the US Federal Reserve, and fear of rising US inflation also weighed on the market sentiment.

In the week starting from August 4, the market is expected to consolidate further with focus on the RBI monetary policy decision, Trump tariff updates, if any, developments related to the India-US trade deal, corporate earnings, and services PMI data, along with FII mood.

The Nifty 50 fell 1.09 percent to 24,565, and the BSE Sensex declined 1.06 percent to 80,600, taking the total loss in the last five straight weeks to over 4 percent. The broader markets saw major selling pressure, with the Nifty Midcap and Smallcap 100 indices down 2.37 percent and 3.42 percent, respectively.

Going forward, "investors will closely monitor the upcoming RBI rate decision this week, while the risks remain tilted to the downside," Vinod Nair, Head of Research at Geojit Investments, said.

According to him, a stable inflation outlook, potential progress in trade talks, and selective strength in domestic sectors are anticipated to lay the groundwork for a market recovery.

The three-day RBI MPC monetary policy meeting outcome due on August 6 will be the key factor to watch, on the domestic front, this week, considering the consistent moderation in inflation and rising external headwinds. Given the incomplete transmission of previous rate cuts, most economists expect no change in the repo rate of 5.5 percent unless there is any risk to economic growth, but look for any revision in full-year inflation and economic growth forecast, as well as the central bank's commentary, given the imposition of a 25 percent tariff by Trump on India.

The June quarter earnings season will be near the end as more than 800 companies will be releasing their quarterly numbers in the second last week of the earnings season, including the Nifty 50 names like State Bank of India, Bharti Airtel, Bajaj Auto, Tata Motors, Adani Ports and Special Economic Zone, Hero MotoCorp, Trent, Titan Company, and Grasim Industries.

Among others, Life Insurance Corporation of India, Britannia Industries, Lupin, Shree Cement, Aurobindo Pharma, Alembic Pharmaceuticals, Divis Laboratories, Bosch, DLF, Escorts Kubota, Marico, Berger Paints, Bharti Hexacom, Gland Pharma, Gujarat Gas, Prestige Estates Projects, Torrent Power, Bharat Forge, BHEL, Jindal Stainless, Power Finance Corporation, Pidilite, PVR Inox, Apollo Tyres, Biocon, Cummins India, Godrej Consumer Products, HPCL, Kalyan Jewellers, Kalpataru Projects, Metropolis Healthcare, National Aluminium Company, Manappuram Finance, and Voltas will also announce their June quarter numbers.

According to experts, the earnings season announced so far has been mixed.

The market participants will also look for new updates about Trump tariffs, if any, in the coming week. The new tariff rates in the 10-41 percent range by the US on its trade partners announced last week, on July 31, will be implemented effective August 7, which includes 69 countries. Apart from this, the US imposed a total 50 percent tariff rate on Brazil, and a 35 percent tariff in Canada.

The US has a formal agreement with the United Kingdom, which got a 10 percent tariff rate, effective April 5, while Trump negotiated deals with the European Union, Japan, and South Korea last month, but yet to be formalised, hence these countries are getting a 15 percent tariff rate. Further, Mexico, which has a 25 percent tariff rate, received an extension for the temporary trade agreement till October 30, while there is a 30 percent tariff rate on China.

For India, the tariff rate is 25 percent. Now, all eyes will be on the second half of August when the US delegates visit India.

Apart from the final Services PMI data for July by several key nations, the focus will also be on the monthly factory orders, vehicle sales, balance of trade, and weekly jobs data, along with consumer inflation expectations in the United States.

Further, the Bank of England's interest rate decision, Europe's monthly retail sales and construction PMI, and China's inflation data will also be watched this week.

Back home, the final data for HSBC Services PMI for July will be announced on August 5, followed by foreign exchange reserves on August 8.

As per the preliminary estimates, Services PMI dropped to 59.8 in July, down from 60.4 in the previous month.

The market participants will also keep an eye on the institutions flow to the market as Foreign Institutional Investors (FIIs) maintained bearish view on the equity markets due to Trump tariffs and rising US dollar index, offloading over Rs 20,500 crore worth shares in the last week ended August 1 which is much more than the previous week's outflow (of nearly Rs 12,000 crore), though they remained net buyers in the primary market. However, Domestic Institutional Investors (FIIs) continued to provide healthy support to the market, buying shares to the tune of Rs 24,300 crore, higher than Rs 17,932 crore worth of buying in the previous week, which means they more than offset the FII outflow.

The US dollar index jumped over the 100 mark during the week, before closing at 98.68, up 1.04 percent over the previous week. On the other side, the Indian rupee remained bearish for the fifth consecutive week, weakening by 0.88 percent to 87.22 against the US dollar after climbing up to 87.798 during the week (which is near its previous record low of 87.972).

The activity at the primary market desk remained strong despite weakness in the equity markets, with 12 IPOs worth Rs 9,200 crore opening this week, along with 14 new stocks debuting on the bourses.

In the mainboard segment, toll collection services provider Highway Infrastructure and leading office REIT Knowledge Realty Trust will open their Rs 130-crore and Rs 4,800-crore public issue, respectively, on August 5. Further, Sajjan Jindal-led JSW Group-backed JSW Cement and plastics consumerware maker All Time Plastics will launch their IPOs on August 7. JSW Cement is set to raise Rs 3,600 crore, and All Time Plastics' offer size is expected to be around Rs 390 crore if the upper price band is set at Rs 248 per share.

The SME segment will also have eight IPO launches this week, including Bhadora Industries, Parth Electricals & Engineering, Jyoti Global Plast, Aaradhya Disposal Industries, BLT Logistics, and Essex Marine, which are scheduled to open on August 4. Further, Sawaliya Foods Products and ANB Metal Cast will open their maiden public issues on August 7 and 8, respectively.

Meanwhile, Cash Ur Drive Marketing, Renol Polychem will close their offers on August 4, and Flysbs Aviation on August 5.

In the mainboard segment, Aditya Infotech and Laxmi India Finance will debut on the bourses on August 5, followed by National Securities Depository (NSDL), M&B Engineering, and Sri Lotus Developers, which are scheduled for listing on August 6.

Further, Umiya Mobile, Repono, Kaytex Fabrics, Takyon Networks, Mehul Colours, BD Industries (Pune), Renol Polychem, Cash Ur Drive Marketing, and Flysbs Aviation from the SME segment, will be available for trading on the bourses this week.

Technically, the Nifty 50 is looking bearish given it is trading below 20, 50, and 100-day EMAs on the daily charts. Even the momentum indicators with RSI at 51.79 maintained bearish crossover, and the MACD is on the verge of negative crossover with histogram momentum consistently fading, while on the daily charts, the RSI at 36 and the MACD remained below the zero line with weakness in the histogram. If the index rebounds, given that it is near its 20-week EMA, 24,800-24,850 is the level to watch (which is near the 10-week EMA). Until the index closes and sustains above short-term moving averages, the consolidation may continue. In case the weak momentum gains more strength, the 24,473 (the June low) is the level to watch as decisive trade below it can open the door for the 24,200-24,000 zone, according to experts.

The weekly options data clearly indicated that the Nifty 50 may trade in the 24,000-25,000 range in the short term, with 24,700-24,800 being immediate resistance and 24,500 being support.

The maximum Call open interest was observed at the 25,000 strike, followed by the 24,800 and 24,700 strikes, with the maximum Call writing at same strikes, while the 24,200 strike saw the maximum Put open interest, followed by the 24,000 and 24,500 strikes, with the maximum Put writing at the 24,200 strike, and then the 24,000 and 24,300 strikes.

Meanwhile, the fear index, India VIX gained for the first time in the last seven consecutive weeks, rising 6.21 percent to 11.98 zone signalling some caution for bulls. Overall, it is still in lower zones, hence the traders need to be alert for any sharp spike in volatility.