As Nifty Nears Record High, Investors Watch 10 Key Factors Including Q2 Results, India–US Trade Deal, China GDP & Global PMI Data
Strong Festive Mood on D-Street Despite Global Crosscurrents
The upcoming truncated trading week starting October 20 is expected to carry bullish undertones, riding on strong Q2 earnings, improving macro signals, and optimism around the India–US trade deal.
- The Nifty 50 has rallied 1.68% in the past week to close at 25,710, notching a third straight weekly gain and a new 52-week high.
- Despite global concerns like a US government shutdown and China trade stress, domestic resilience and festive demand have kept Indian equities in a solid uptrend.
Here’s a look at 10 key factors that could shape the market in the week leading up to Diwali:
1. Q2 Earnings Season: Slower But Still Critical
The September quarter earnings will continue to guide stock-specific action, albeit at a slower pace due to the festive holiday.
- Four Nifty 50 companies will report: HUL, Dr Reddy’s, Kotak Bank, and SBI Life.
- Other names to watch: ITC Hotels, Coforge, Latent View Analytics, Laurus Labs, eClerx, SBI Cards, Aditya Birla AMC, and more.
- On Monday, markets will react to Reliance, ICICI Bank, and HDFC Bank results released over the weekend.
2. India–US Trade Deal Developments
Investor focus remains on positive signals from recent bilateral talks, with expectations that phase one of the trade agreement could be finalized before year-end.
- Reports suggest no major sticking points, and market optimism is riding on clarity in trade relations.
- A deal could boost sectors such as pharma, agriculture, and defence exports.
3. US Government Shutdown & Inflation Print
Markets will closely monitor ongoing US budget gridlock, now into its fourth week.
- If unresolved by October 22, this could become the second-longest shutdown in US history.
- Also in focus is the delayed US inflation data, now expected on October 24.
- Headline inflation is likely to rise from 2.9% (Aug).
- Core inflation is expected to remain steady around 3.1%, which could impact Fed rate expectations.
4. China’s Q3 GDP and Key Macro Indicators
Several important data points from China are due next week:
- Q3 GDP growth
- Retail sales, industrial output, and unemployment rate
- These will shape sentiment on emerging markets and commodities
Also, the Flash PMI numbers for manufacturing and services from US, UK, Japan, and Eurozone will provide early signs of global economic health.
5. China’s Communist Party Plenum
Running from October 20–23, this closed-door policy meeting will set China’s economic roadmap for 2026–2030.
- Any signal on stimulus, foreign investment policy, or geopolitical posture—especially ahead of a potential Xi–Trump meeting—will be closely tracked.
- This could influence global risk appetite.
6. Domestic Macro Data
India’s own economic health indicators will be released mid-week:
- Infrastructure output (Oct 21)
- HSBC Manufacturing & Services PMI (Oct 24)
- Forex reserves data
In September, manufacturing PMI dipped to 57.7 and services to 60.9, but both remained in expansion zone.
7. FII and DII Flows
Foreign Institutional Investors (FIIs) remained mild net sellers last week (₹374 crore), but the pace of outflow has slowed sharply this month (₹587 crore net outflow).
- Meanwhile, Domestic Institutional Investors (DIIs) bought equities worth ₹5,688 crore last week, and over ₹28,000 crore in October.
- This DII support is helping stabilize markets even during global risk-off spells.
8. Technical Setup: Bullish with Resistance Ahead
The Nifty 50 has broken above key resistance zones and is on track to retest all-time highs.
- Sustaining above 25,740 will likely trigger a rally toward 26,000, then 26,200–26,300 (record high: 26,277).
- Support is seen at 25,500, with overall momentum indicators suggesting strength:
- RSI: 69.34
- MACD: Positive crossover
- Bullish candle patterns with rising volume
9. F&O Cues: Options Data Supports Bullish Sentiment
Weekly derivatives positioning points to a strong base at 25,500 and resistance near 26,000.
- Max Call OI: 26,000 (resistance)
- Max Put OI: 25,500 (support)
- Fresh Put writing seen at 25,700, 25,650, 25,750 – a sign of confidence
- India VIX rose 15% to 11.63, but remains in historically low-risk territory
10. Holiday & Muhurat Trading
- October 21 (Diwali Laxmi Pujan): One-hour Muhurat Trading
- October 22: Market Holiday for Balipratipada
Expect light volumes, but positive sentiment, as festive season historically brings optimism and inflows.
Markets head into a truncated Diwali week with bullish momentum supported by Q2 earnings, trade optimism, and strong domestic cues. Global triggers such as US inflation, China GDP, and a possible US shutdown resolution will guide investor mood, while technical indicators point to a potential retest of all-time highs.