Daijiworld Media Network - Mumbai

Mumbai, May 4: Indian stock markets are set for a potentially volatile week as a mix of global and domestic factors — including the US Federal Reserve’s policy decision, quarterly earnings, key macroeconomic data, and geopolitical tensions — weigh on investor sentiment.

After a strong run last week, where the Sensex surged 1,289.46 points (1.62%) to close at 80,501.99 and the Nifty added 307.35 points (1.28%) to end at 24,346.70, analysts warn that upcoming events could drive sharp movements in the market.

Much of the focus is on the US Federal Reserve’s monetary policy meeting on May 7. The central bank is expected to hold interest rates steady for the third consecutive time at 4.25–4.50%. However, Fed Chair Jerome Powell’s previous comments — signaling two potential rate cuts in 2025 and cautioning that tariff hikes by former President Donald Trump could reignite inflation — have raised investor caution.

Back home, corporate earnings will continue to set the tone. Major companies like Mahindra & Mahindra, Coal India, Titan, Coforge, and Dr. Reddy’s Laboratories are scheduled to announce their March-quarter results, which could influence sectoral moves and broader market sentiment.

Macroeconomic indicators will also be in focus, particularly the HSBC Composite and Services PMI data, as investors look for clues on India’s growth trajectory.

Meanwhile, foreign investors have returned to Indian equities with renewed optimism. Foreign Institutional Investors (FIIs) bought shares worth nearly Rs 7,680 crore in the week ending May 2, a sharp reversal from the ?1.29 lakh crore they offloaded in the first quarter of 2025. Domestic Institutional Investors (DIIs) also supported the rally with Rs 9,269 crore in net purchases.

However, concerns remain over geopolitical tensions following the April 22 terror attack in Pahalgam, Jammu and Kashmir, which may act as a drag on market gains.

With multiple drivers at play, experts caution that market volatility is likely to remain high through the coming week.