Market Outlook: Key Factors Driving the Week Ahead

Indian stock markets experienced a week of mixed signals, grappling with macroeconomic pressures and global uncertainties. The rupee's decline was partially countered by the US Federal Reserve's interest rate cut and growing optimism surrounding India-US trade negotiations.

While foreign investors reduced their equity holdings, sustained buying from domestic institutional investors offered some support. Looking ahead, market direction will likely be influenced by developments in India-US trade talks and upcoming economic data releases.

**Recap of Market Performance**

This past week, macroeconomic pressures and global factors shaped market movements. The rupee weakened to a new low of 90.56 against the US dollar, which dampened overall market sentiment. That said, the reality is a bit more complicated. the US Federal Reserve's decision to cut interest rates by 25 basis points provided some relief, as did positive signals from ongoing India-US trade discussions, which helped limit further losses. Foreign Institutional Investors (FIIs) continued to sell off equities, adding pressure on market benchmarks. Domestic Institutional Investors (DIIs), however, provided crucial support through sustained buying activity.

At the close of the week, the Nifty50 index had fallen by 139.50 points (0.53%) to 26,046, while the BSE Sensex declined by 445 points, settling at 85,268. Overall, the markets underwent a minor correction, with the Nifty entering a downward consolidation phase before ultimately closing the week in negative territory.

**Key Factors to Watch This Week**

The progress of India-US trade talks will be a primary focus, potentially impacting both stock values and the rupee's performance. Market participants anticipate range-bound trading with intermittent volatility across broader indices, awaiting a formal breakthrough in trade discussions.