Dalal Street week ahead: India-US trade deal, Q1 results among 5 key triggers for Indian stock market in coming week

Mint

15 hours ago

Indian stock market ended in the negative territory for the week ended July 4, largely due to profit booking amid lingering uncertainty over the India-US trade deal, caution ahead of the start of the earnings season and foreign capital outflow.
The Nifty 50 and the Sensex closed 0.70 per cent lower each for the week, snapping their two-week gaining streak.
"The decline was primarily driven by profit-taking, as investors adopted a cautious stance ahead of key global trade events. Concerns around potential US trade retaliation created doubts about the timely finalisation of trade agreements with major economies, including India. However, the downside remained limited following reports of a likely interim deal between India and the US ahead of the scheduled deadline," said Ajit Mishra, SVP of research at Religare Broking.
However, the mid and small-cap segments remained resilient. Extending gains to the second consecutive week, the Nifty Midcap 100 and the Nifty Smallcap 100 indices rose 0.50 per cent and 0.30 per cent, respectively.
While the broader trend of the market remains positive, the coming week holds several key triggers, including India-US trade deals, Q1FY26 earnings and the minutes of the US FOMC's last meeting, that could dictate the short-term trend of the Indian stock market.
Despite prolonged negotiations, there is still no clarity on when a trade deal between India and the US will be finalised.
With US President Donald Trump's July 9 deadline set to expire in the coming week, investor anxiety is mounting over what the next few days might bring.
According to media reports, Indian negotiators returned from the US on Friday. Meanwhile, India on Friday proposed to impose retaliatory duties under the WTO norms against the US.
Commerce Minister Piyush Goyal on Friday stressed that India will not enter into any pact based on deadlines. He said New Delhi will not sign any agreement with the US until it is not fully finalised, properly concluded and in national interest.
Experts say a breakthrough would be significant for export-oriented sectors such as IT, pharmaceuticals, and auto components. However, a continued impasse could negatively impact the domestic market in the short term.
"The coming week holds significant importance not only for Indian markets but for global
equities as well. The most anticipated event is the outcome of the US trade deadline on July 9, which could shape global trade dynamics," said Mishra.
India Inc.'s earnings season for the first quarter of FY26 is set to begin next week. IT majors TCS and Tata Elxsi will announce their Q1 results on Thursday, July 10, followed by retail player DMart on Friday, July 11. Growth guidance and management commentary will be closely watched and are expected to set the tone for market sentiment.
The monsoon this year has been healthy. As InCred Equities pointed out, India received above-normal southwest monsoon rainfall in June 2025, with cumulative precipitation 8.9 per cent higher than the long-period average (LPA). This marked the earliest full coverage since 2020 and helped kharif crop sowing rise by a strong 11 per cent year-on-year.
According to the India Meteorological Department (IMD), active monsoon conditions are likely to continue over many parts of northwest, central and east India during the next six to seven days.
The progress of the monsoon will remain on investors' radar, as it plays a key role in keeping India's growth-inflation dynamics favourable in the medium term.
Foreign portfolio investors (FPIs) have been offloading Indian equities this month amid ongoing uncertainty over India-US trade talks, stretched market valuations, and the absence of fresh positive triggers.
In July so far, FPIs have sold Indian equities worth ₹ 5,773 crore. A sustained foreign capital outflow can keep the domestic market subdued.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, underscored that the resumption of FPI buying will hinge on two things- an India-US trade deal and Q1FY26 earnings trends.
"If a trade deal happens between India and the US that will be positive for markets and FPI flows. Besides, if Q1 results indicate earnings recovery, that will be positive. Disappointment on these factors can impact the market and, thereby, FPI flows," said Vijayakumar.
Amid the buzz around trade talks and earnings, global markets will closely parse the minutes of the US Federal Open Market Committee's (FOMC) June 17–18 meeting for insights into how Fed officials view inflation, growth, and the future path of interest rates.
The US Federal Reserve's next policy meeting is scheduled for July 29–30. While experts see a potential rate cut in September, recent jobs data suggests the US labour market remains resilient, giving the Fed room to delay any immediate policy easing.
Meanwhile, Fed Chair Jerome Powell has said he expects the impact of tariffs to show up in inflation data over the coming months. Taken together, these developments indicate that rate cuts could remain on hold for a longer period than previously anticipated.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.