Market Outlook: Tariff Tensions, Inflation Data Key Triggers Next Week
Over 1,400 companies including from sectors such as metals, energy and pharmaceuticals are scheduled to report Q1 FY26 results next week, as quarterly earnings cycle comes to an end. Grasim Industries, Hero MotoCorp, India Lease Development, and other major companies are scheduled to release their quarterly earnings on August 11.
On the macroeconomic front, investors are focused on domestic CPI and WPI inflation data, set to be released on August 12 and August 14. Last week, markets fell for the sixth straight week following US President Donald Trump's unexpected announcement of a 50 per cent tariff on Indian goods. The Nifty and Sensex fell by nearly one per cent, closing at 24,363 and 79,857, respectively.
FII selling persisted during the week, indicating broader risk aversion in emerging markets. However, ongoing purchases by DIIs helped mitigate losses. Domestic resilience is shown by strong July GST collections and rising PMI readings. However, increasing input costs, inflation trends, and weaknesses in the banking and IT sectors may cap upside.
Ajit Mishra from Religare Broking Ltd said, "The Nifty's close below 24,450 has increased the risk of further correction, with immediate support placed near 24,200. On the upside, resistance is expected around the 24,600–24,800 zone, with a stronger barrier at 25,200."
"Broader market indices remain vulnerable given their higher beta to FII outflows. Any rebound is likely to be short-lived unless accompanied by easing trade tensions and a reversal in FII flows," he added. On the sectoral front, domestic demand-driven segments such as infrastructure, select autos, and rural-focused FMCG may display relative resilience if macro conditions hold steady.
Investors may adopt a defensive-to-neutral stance, prioritising companies with strong domestic earnings visibility and low tariff exposure, while maintaining cash buffers for opportunities during deeper corrections, said analysts.
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