After a week of sharp selling pressure, the Indian stock market staged a strong recovery in the week ended October 30, gaining around 2 percent. The rebound was supported by easing oil prices, softer bond yields and a decline in India VIX. Broader markets also bounced back sharply, outperforming the benchmark indices amid improving macroeconomic conditions. Meanwhile, the US Federal Reserve, the Bank of Japan and the European Central Bank kept interest rates unchanged, while maintaining a cautious stance amid concerns over rising inflation.
On Monday, the domestic market will first react to Reliance Industries' healthy September-quarter earnings, announced on Friday after market hours, along with the monthly auto sales data released on Sunday. Looking ahead, the market is expected to remain volatile and range-bound with a positive bias in the week starting November 2. Investors will focus on the US midterm elections and jobs data, the next batch of corporate earnings, final PMI readings, crude oil price movements and geopolitical tensions between the US and Iran.
The Nifty 50 rallied 453 points, or 2 percent, during the week to close at 23,053, while the BSE Sensex surged 1,336 points, or 1.83 percent, to settle at 74,460, while for October, the indices snapped two-month losing streak, gaining 1.93 percent and 2.73 percent, respectively. The broader market also witnessed a strong recovery, with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining 2.69 percent and 4.08 percent in the week, respectively, following the sharp decline in the previous week.
Among sectors, pharma and healthcare led the rally on the back of encouraging earnings. Realty stocks gained amid softer bond yields, while metals, FMCG and automobile stocks benefited from expectations of easing input costs. "Indian equities are expected to remain range-bound with bouts of volatility next week, ahead of the US midterm elections on Tuesday and amid uncertainty over a potential escalation of geopolitical tensions between the US and Iran, which is likely to keep market sentiment cautious," said Siddhartha Khemka, Head of Research, Wealth Management, at Motilal Oswal Financial Services.
According to Vinod Nair, Head of Research at Geojit Investments, US PMI readings, jobs data and the outcome of the US midterm elections will be crucial in shaping global risk appetite, while domestic PMI data and second-quarter earnings will drive stock-specific movements. With geopolitical risks resurfacing and crude oil prices remaining elevated, volatility is unlikely to subside quickly, he said.
Against this backdrop, Nair favours gradually accumulating quality businesses with resilient earnings visibility and reasonable valuations rather than chasing the broader market. Here are 10 key factors to watch next week: 1) Corporate Earnings The coming week is expected to be super busy one for the September quarter earnings season as more than 1,450 companies are set to release their quarterly numbers including Nifty 50 names like ITC, Bajaj Finserv, State Bank of India, Apollo Hospitals Enterprise, Bharti Airtel, Mahindra & Mahindra, Oil and Natural Gas Corporation, Titan Company, Hindalco Industries, and Tata Steel.
Among non-Nifty companies, National Stock Exchange of India, Lenskart Solutions, FSN E-Commerce Ventures Nykaa, One Mobikwik Systems, LG Electronics India, Life Insurance Corporation of India, Lupin, Amara Raja Energy & Mobility, Container Corporation of India, Escorts Kubota, KEC International, Marico, National Aluminium Company, Petronet LNG, Sun Pharma Advanced Research Company, Trident, UPL, Wockhardt, Bata India, Bayer CropScience, Clean Max Enviro Energy Solutions, Dhoot Transmission, GSPL Transmission, Multi Commodity Exchange of India, Metropolis Healthcare, Mahanagar Gas, Manipal Payment and Identity Solutions, Alembic Pharmaceuticals, Apollo Tyres, Aurobindo Pharma, Biocon, Cummins India, Dabur India, Exide Industries, Dr Lal PathLabs, Power Finance Corporation, Premier Energies, Physicswallah, Torrent Power, Zydus Lifesciences, AstraZeneca Pharma, Bharat Forge, Bharti Hexacom, Britannia Industries, Emami, Fortis Healthcare, Glenmark Pharmaceuticals, Ipca Laboratories, Prestige Estates Projects, Shiprocket, Tube Investments of India, Tonbo Imaging India, Bosch, Gland Pharma, Honasa Consumer, Jubilant FoodWorks, Voltas, Divis Laboratories, and Tata Chemicals will also announce their numbers next week.
2) US Midterm Elections, Jobs Data Globally, market participants across asset classes will closely monitor the US midterm elections, scheduled for November 3, along with the monthly US jobs report due next week. According to market experts, the election outcome could influence expectations around fiscal and energy policies, as well as Washington's stance towards Iran, with direct implications for crude oil prices.
Meanwhile, the US employment report, including non-farm payrolls, along with JOLTS job openings and quits data, will be among the key macroeconomic releases to watch, particularly as the US Federal Reserve continues to emphasise a data-dependent approach to monetary policy. A series of speeches by Fed officials will also be monitored for further clues on the monetary policy outlook. Meanwhile, the US 10-year Treasury yield remained below the 5 percent mark for another week, declining 1.32 percent to 4.93 percent and extending its downward trend for the fourth consecutive week.
The decline follows a sharp rise to a multi-decade high of 5.365 percent in October. "Strong payroll growth accompanied by firm wages would reinforce expectations of a December rate hike, support the dollar and maintain pressure on gold and silver. A softer outcome could moderate tightening expectations and provide some relief to precious metals," said Kaynat Chainwala of Kotak Neo, adding that the remaining technology earnings would also be important to watch.
3) Global Economic Data Additionally, final manufacturing and services PMI readings from major economies, including the United States, Japan, China and European countries, will be closely watched by global investors. Market participants will also keep a close watch on crude oil prices, which remain a crucial factor for net oil-importing countries such as India. Brent crude futures, the international oil benchmark, remained above the US$110-a-barrel mark for another week, declining 3.9 percent during the week to settle at US$112.27 a barrel after touching a high of US$117.37.
However, oil prices rebounded over the last two trading sessions (Thursday and Friday) following a correction in the previous three sessions, as the geopolitical risk premium increased amid reports that the Trump administration was considering military options against Iran. Brent crude surged 14.75 percent in October, extending its upward trend for the fourth consecutive month and closing at its highest level since May 2022.
The prospect of renewed strikes following the November 3 midterm elections, along with regional contingency preparations, has heightened concerns over potential disruptions to Gulf oil production, Saudi energy infrastructure and shipping routes. "With global inventories relatively tight, near-term risks remain skewed to the upside. Brent could move above $120 in the event of a confirmed disruption to Saudi production or exports, while a credible diplomatic breakthrough could remove a significant portion of the geopolitical premium and pull prices below $105," said Kaynat Chainwala.
5) Domestic Economic Data Back home, the market participants will focus on the final numbers of HSBC Manufacturing PMI, and HSBC Services PMI for October month, releasing on November 2 and November 4, respectively. According to the preliminary estimates, the manufacturing PMI fell to 54.9 in October from 55.1 in previous month, however, the services PMI rose to 56.2 from 55.2 in the same period. Foreign exchange reserves for week ended October 30 will also be released next week, on November 6.
In the previous week ended October 23, forex reserves dropped to US$ 719.75 billion from US$ 721.02 billion in the previous week. Foreign institutional investors (FIIs) appear to be turning more positive towards Indian equities, as reflected in their buying activity during the second half of October. However, there is not yet enough evidence to confirm a sustained reversal in their investment trend.
Whether foreign investors continue to increase their exposure to Indian equities will therefore remain a key factor to watch, as their flows could play a crucial role in determining the direction of the domestic equity market. FIIs were net buyers of Indian equities worth Rs 6,305 crore during the week. However, they remained net sellers for October, with cumulative outflows exceeding Rs 45,000 crore.
"There are many factors that might have triggered this change in stance. One, the US Fed holding rates is a positive for equity markets globally. Second, the valuations in Indian markets, particularly in large-caps, have become very attractive. Three, perhaps this is more important, there are clear indications of sustained momentum in economic growth in India. The surge in credit growth (RBI) is impressive and indicative of robust growth ahead.
There are signs of improvement in industrial capex, too. Another factor is the weakening AI trade, globally," said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. Domestic institutional investors (DIIs) continued to remain net buyers, purchasing shares worth Rs 3,100 crore during the week and taking their cumulative buying in October to Rs 62,000 crore. Meanwhile, the Indian rupee remained largely unchanged for another week, closing at 94.94 against the US dollar on October 30, compared with 94.93 on October 23.
Meanwhile, activity in the primary market is expected to remain muted in the first week of November, particularly after the busy IPO schedule witnessed in recent weeks. The only IPO opening for subscription next week belongs to the SME segment, while the mainboard segment will remain inactive. Vedant Poly Fabs will open its Rs 56.68-crore IPO for public subscription on November 2. Meanwhile, Bombay Coated & Special Steels and Antala Industries will close their public issues on November 2.
This will be followed by Johnsoncab Electricals, HGS (India), Vectras Enprocon and Maxwell Engineering Solutions, whose IPOs are scheduled to close on November 3. A total of 13 companies are set to make their stock market debut next week, with EAAA India Alternatives scheduled to be the first to list on November 2 in the mainboard segment. This will be followed by BLS Polymers and SFC Environmental Technologies on November 3, M K Sons Fine Jewels on November 4, and Bombay Coated & Special Steels on November 5.
In the SME segment, Wiscon Industries will be the first to list on November 3, followed by Carver Roboweld and Ajwa Projects on November 4, and Antala Industries on November 5. Subsequently, Johnsoncab Electricals, Vectras Enprocon, HGS (India) and Maxwell Engineering Solutions are scheduled to make their market debut on November 6. Technically, with further improvement in momentum indicators and the Nifty 50 trading above its short-term moving averages, the index is expected to maintain its upward bias in the coming week, provided it sustains above the 22,800-22,900 support zone.
The 23,150-23,200 range is likely to act as the immediate resistance zone. A decisive move above this range could open the door for a rally towards 23,500. On the downside, a break below 22,800 could weaken the near-term bullish outlook, with the 22,400-22,500 zone expected to offer the next crucial support. 9) F&O Cues, India VIX The weekly options data indicated that the 23,500 strike, which has the highest Call open interest, is expected to act as a crucial resistance for the Nifty 50, followed by the 23,200 strike, which has the second-highest Call open interest and is likely to serve as an immediate hurdle.
On the other hand, the 22,700 and 22,800 strikes, where the highest Put open interest is concentrated, could provide crucial support to the index. The 23,000 strike, which has the next-highest Put open interest, is also expected to act as an immediate support level. Meanwhile, the India VIX, which measures expected market volatility, remained elevated and above all its key moving averages despite declining 9.24 percent during the week to 15.30.
A decisive fall below the 13 mark could be necessary for bulls to gain greater confidence, while they are likely to remain cautious as long as volatility stays elevated. Here are key corporate actions taking place next week:
