The Indian stock market experienced heightened volatility and settled on a sombre note last week, largely due to the turbulence in the global bond markets and foreign outflows. US tariffs escalated global trade tensions.

Next, investors will monitor some key market triggers in the coming week. The last set of March quarter earnings for fiscal 2024-25 (Q4FY25), domestic macroeconomic data, scheduled monthly expiry of May derivatives contracts, foreign fund flows, and global cues will dictate the market trend in the week.

Indian stock market trends

India’s capital market closed the week on a subdued note, with domestic equity benchmarks Nifty and Sensex declining nearly 0.7 per cent each, settling at 24,853 and 81,721, respectively. In contrast, the Bank Nifty index edged up by 43 points, buoyed by positive sentiments in banking indices.

“Despite the downturn, the Nifty 50 continues to trade above its key moving averages, including the 21-day and 200-day EMAs, indicating underlying strength,” said Puneet Singhania, Director at Master Trust Group.

Rising US Treasury yields dampened investor sentiment, with the 10-year yield hitting 4.63 per cent, its highest since February. According to Ajit Mishra, SVP, Research, Religare Broking, mixed corporate earnings and delays in finalising the India-US trade agreement added to the uncertainty, prompting profit-booking and a guarded stance among market participants.

“Expectations of a normal monsoon, which is favourable for agricultural productivity, combined with declining crude oil prices, are likely to keep inflationary pressures subdued,” said Vinod Nair, Head of Research, Geojit Investments.

“A softer inflation outlook provides greater flexibility to maintain an accommodative monetary policy stance, potentially paving the way for interest rate cuts to support economic growth. Looking ahead, investors will be closely watching the upcoming Indian GDP figures, along with the US.”

This week, the primary market will witness more action, with several new initial public offerings (IPO) and listings slated across the mainboard and small and medium enterprises (SME) segments. The week will be critical from the domestic and technical points of view. Investors will track domestic macroeconomic data, geopolitical events, along with corporate earnings.

Here are the key triggers for stock markets in the coming week:

Q4 Results, Macro data

The release of India’s industrial and manufacturing production data for April, scheduled for May 28, along with the FY25 and Q4FY25 gross domestic product (GDP) growth figures, on May 30, will offer insights into the economic recovery trajectory.

Updates on the progress of the monsoon will also be closely monitored. The final leg of the Q4 earnings season—with results from key companies like Bajaj Auto, Aurobindo Pharma, and IRCTC—will remain in focus. Investors will closely track the management commentary and sectoral trends.

IPO Action: 9 new issues to hit D-Street

Four new mainboard public issues will open for subscription in the coming week: the Aegis Vopak Terminals IPO, Leela Hotels IPO (Schloss Bangalore Ltd), Prostarm Info Systems IPO, and Scoda Tubes IPO. Additionally, five new SME IPOs will also be open for bidding in the next five days. Check full list here

FII Activity

The foreign institutional investors (FIIs) sold ₹11,591 crore, while DIIs bought ₹11,199 crore during the week. Foreign Portfolio Investment (FPI) flows in India have seen significant outflows in recent quarters, dragged by weak corporate earnings, election uncertainties, and a slowdown in urban consumption.

These domestic concerns were compounded by global headwinds, including fears of a slowdown due to potential policy changes, such as tariffs from the Trump administration, which impacted global currencies, bond markets, and delayed decision-making by large global corporations.

However, history suggests that periods of intense FPI sell-offs are followed by strong rebounds. Early signs of renewed interest have emerged in recent weeks, indicating potential optimism. India’s position as one of the fastest-growing major economies remains a key attraction for global investors.

“While short-term uncertainties may persist due to global developments, the long-term outlook for FPI flows into India remains positive—especially if corporate earnings align with current market valuations, enhancing investor confidence and justifying sustained capital inflows,” said Saurabh Patwa, Head of Research and Portfolio Manager, Quest Investment Advisors.
 

Global Cues

On the global front, rising US bond yields and concerns over the US’s debt burden triggered foreign portfolio outflows, putting pressure on emerging markets, including India. Speculation around favourable developments in the US-China trade deal raised concerns about potential capital outflows or reduced inflows into Indian markets, further denting sentiment.

Volatility may rise amid the expected announcement of a new US tax policy, which could impact global investment flows in the long run. On the global front, developments in the US bond market, the release of the Federal Open Market Committee (FOMC) minutes, and progress in the India-US trade negotiations will continue to influence market sentiment.

Analysts say that possible progress in the India-US trade deal and comments from US Fed Chair Jerome Powell will also shape market sentiment. On Monday, May 26, US Fed Chairman Jerome Powell will deliver a speech, offering insights into the US Federal Reserve’s monetary policy stance.

Market participants will look for signals on future rate decisions, especially with potential shifts under Trump’s policies and economic uncertainties. On Wednesday, May 28, the FOMC minutes from the May 6–7, 2025, meeting will be released.

The minutes will detail the US Federal Reserve’s discussions on the current 4.25–4.50 per cent federal rate and provide key insights into the US Fed’s outlook on interest rates, inflation, and the economy.

The US GDP growth rate (second estimate, Q1 2025) is set to be released on Thursday, May 29. Meanwhile, the US Initial Jobless claims data will also be released on Thursday, a key indicator of US labour market health.

Corporate Action

Shares of Bajaj Finance, ITC, Angel One, L&T Finance, Tata Consumer Products, Lloyds Metals and Energy, Infosys, Colgate Palmolive (India), and several others will trade ex-dividend next week, starting from Monday, May 26. Shares of some stocks will also trade ex-bonus. Check full list here

Technical View

Technically, Nifty 50 is undergoing a consolidation phase, with immediate support around 24,500, near its short-term moving average. On the upside, a decisive breakout above 25,200 could reignite bullish momentum and pave the way toward the 25,600 level. Read full technical analysis here

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.