Dalal Street Week Ahead: Q2 Earnings, US inflation, China GDP, Flash PMI among 10 key factors to watch

Dalal Street Week Ahead

The market clocked around 1.7 percent rally for the week ended October 17, continuing upward journey for third consecutive week and scaling fresh 52-week high, signalling the confidence among traders and investors, ahead of Diwali celebration week. The credit goes to resilient domestic cues despite external headwinds like fear of asset quality stress in the US banking system and US-China trade tariff concerns.

The easing concerns around asset quality in the financial sector, healthy festive demand, rising optimism with further progress in India–US trade deal talks, strengthening rupee against US dollar, and renewed FII buying interest lifted sentiment.

Meanwhile, the safe-haven commodity, gold prices surged to record high of $4,392 per ounce as global uncertainties prompted a flight to safety, rising 5.32 percent for the week.

On Monday, the market will first react to earnings announced by index heavyweights Reliance Industries, ICICI Bank, and HDFC Bank on last Friday and Saturday, while overall, in the coming truncated week starting from October 20, the market sentiments are expected to remain positive despite intermittent volatility, with focus on more corporate earnings, further update related to India-US trade deal talks, US inflation, China's GDP numbers, and flash PMI data, experts said.

The Nifty 50 soared 425 points (1.68 percent) to 25,710, and the BSE Sensex rallied 1,451 points (1.76 percent) to 83,952, while the broader markets underperformed the benchmark indices with the Nifty Midcap 100 index rising 0.35 percent and Small-cap 100 index falling 0.06 percent.

"Next week, Indian markets would be in a festive mood. Overall, we expect market to continue its up-move, supported by healthy Q2 earnings so far, robust festive demand, optimism over a potential India–US trade deal and renewed FII buying in recent sessions," Siddhartha Khemka - Head Of Research, Wealth Management at Motilal Oswal Financial Services said.

According to, Vinod Nair, Head of Research at Geojit Investments, the trajectory of Indian equities will be shaped by the ongoing earnings season and policy signals from major global central banks.

"Investors are expected to maintain a preference for high-quality names across consumption, banking, and real estate, with any market corrections likely to attract renewed buying interest," he said.

The market will remain shut on October 22 for Diwali Balipratipada, while there will be one hour of Muhurat Trading on Diwali Laxmi Pujan day, October 21.

Here are 10 key factors to watch for Diwali week:

1) Corporate Earnings

The September quarter earnings season will enter into third week, but the number of companies scheduled for announcing results will be less compared to previous week due to Diwali festival week. About 45 corporate firms will release their numbers next week including four Nifty 50 names - Hindustan Unilever, Dr Reddys Laboratories, SBI Life Insurance Company, and Kotak Mahindra Bank.

Among others, ITC Hotels, Colgate Palmolive, BF Utilities, Trualt Bioenergy, Jain Resource Recycling, Epack Prefab Technologies, Laurus Labs, Tata Teleservices (Maharashtra), Aditya Birla Sun Life AMC, Brigade Hotel Ventures, Coforge, eClerx Services, Latent View Analytics, SBI Cards and Payment Services, Shanthi Gears, and Seshasayee Paper and Boards will also announce quarterly earnings.

2) India-US Trade Deal Hopes

The increasing optimism with respect to India-US trade deal has been one of key reasons for the market rally and is expected to be closely watched in the coming weeks. Media reports indicated that there has been further progress in the recently concluded talks between India and US officials during the visit on October 15-17, with no major differences and there may be a hope that first phase may be concluded in the current quarter.

"Market optimism was bolstered by clarity in India–US trade relations, with both sides tentatively agreeing to conclude the first phase of the deal by November," Vinod Nair said.

3) US Inflation and Shutdown

The globally, the market participants will also focus the US shutdown which is likely stretching into its fourth week, especially after the US Senate failed last week on October 16 to re-open the government and even the second vote for funding the US defence failed to get enough votes.

Now the focus will be on the Senate, which is set to vote on a measure to end the impasse on October 20. "If the funding bill is not passed by October 22, the shutdown would become the second-longest in US history," Kaynat Chainwala of Kotak Securities said.

Attention is also turning to the delayed US inflation data, now expected on October 24, as markets seek fresh clues on the Federal Reserve’s policy outlook. According to experts, the inflation is expected to increase further in September against 2.9 percent seen in August, while the core inflation is expected to be steady at 3.1 percent.

4) Global Economic Data

Further, the focus will be on the several data points from the China including GDP numbers for September 2025 quarter, monthly retail sales, unemployment rate, and industrial production figures.

The manufacturing and services PMI flash numbers for October by several nations including US, UK, Japan and others will also be watched.

5) China's Communist Party Fourth Plenum

Also, globally, the experts will keep an eye on Communist Party Fourth Plenum in China, the closed-door gathering scheduled for four days next week between October 20-23.

This is one of China’s most important meetings as leader Xi Jinping and other ruling Communist Party elites gather in Beijing to map out the goals for the next five years, a blueprint for 2026-2030. The leaders are meeting at a time of heightened trade tensions between Washington and Beijing and just ahead of a possible meeting between Xi and US President Donald Trump during a regional summit later this month. Reports ABC News.

6) Domestic Economic Data

Back home, the infrastructure output data for September will be announced on October 21, followed by HSBC Manufacturing and Services PMI flash numbers for October on October 24. Manufacturing PMI dropped to 57.7 in September against 59.3 in August, and services PMI in the same period fell to 60.9 against 62.9.

On the same day, the foreign exchange reserves will also be released.

7) FII Flow

The activity at the institutional desk will also be watched next week. FIIs (Foreign Institutional Investors) were net sellers for the last week to the tune of Rs 374 crore but the outflow was not significant. They have net sold Rs 587 crore for the current month, which is much lower than the sell-off seen in previous three months. However, they were strong buyers in the primary market.

On other side, DIIs (Domestic Institutional Investors) remained strong net buyers in equities to the tune of Rs 5,688 crore, taking the total current month's buying to Rs 28,044 crore.

Meanwhile, the Indian rupee strengthened during the week, rising 0.88 percent to 87.9540 against the US dollar, while the US dollar index was down by 0.32 percent to 98.54.

8) Technical View

Technically, the Nifty 50 is looking strong as the index cleared the June swing high on closing basis with healthy technical and momentum indicators, paving the way for further bullish bias in upcoming sessions. The index needs to close and sustain above 25,740 (the upper side of bearish gap of October 3, 2024) for further upward journey toward 26,000 followed by 26,200-26,300 (coincides with record high of 26,277), however, the 25,500 is expected to be immediate support zone, experts said.

9) F&O Cues

The weekly options data also suggested that the Nifty 50 is expected to face resistance at 26,000 with support at 25,500.

The maximum Call open interest was seen at the 26,000 strike, followed by the 25,800 and 25,900 strikes, with the maximum Call writing at the 26,000, 25,900 and 25,800 strikes, while the 25,500 strike holds the maximum Put open interest, followed by the 25,300 and 25,200 strikes, with the maximum Put writing at the 25,700, 25,650 and 25,750 strikes.

Meanwhile, the India VIX — commonly referred to as the fear index — surged 15.07 percent during the week to 11.63. Despite the spike, it continues to hover in historically lower zones and does not currently pose a major concern for bullish market participants.

10) Corporate Action

Here are key corporate actions taking place in the coming week: