This week, investors in the Indian equity market are poised to closely monitor a blend of domestic and international cues that are expected to influence market sentiment significantly. Among the key factors shaping the market are the corporate quarterly earnings reports, fluctuations in foreign institutional investor (FII) activity, and potential developments regarding tariffs from the United States. Analysts have indicated that these elements will play a critical role in steering the direction of equity markets in both the short and medium term.

According to industry experts, stock-specific actions primarily driven by the fourth-quarter and annual results for the fiscal year 2025 are likely to dominate trading this week. At the same time, broader market movements will depend heavily on the trading patterns of FIIs, shifts in global crude oil prices, changes in the rupee-dollar exchange rate, and signals emanating from international markets. Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, emphasized, This week, all eyes will be on the earnings reports of key companies, including HCL Technologies, Axis Bank, Hindustan Unilever, and Maruti. In addition, any updates related to tariffs and their potential impact on global markets will remain a focal point for investors.

In the realm of corporate earnings, several pivotal results have already been declared, notably those of Infosys, HDFC Bank, and ICICI Bank. Infosys, which stands as the second-largest IT firm in India, recently reported a concerning 11.7 percent decline in consolidated net profit, which fell to 7,033 crore for the March quarter. This reduction has been attributed mainly to rising employee compensation costs and expenses related to recent acquisitions, raising questions about the sustainability of profit margins in the competitive IT sector.

On a more positive note, HDFC Bank reported a solid 7 percent increase in its consolidated net profit, reaching 18,835 crore for the March quarter. Similarly, ICICI Bank demonstrated remarkable growth with a 15.7 percent increase in consolidated net profit, which amounted to 13,502 crore. However, HDFC has expressed concerns regarding pricing pressures in both home and corporate loan segments, signaling potential challenges to lending growth in the near future.

Market experts are also closely scrutinizing the activities of foreign institutional investors, as their movements can significantly impact market dynamics. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, observed a notable distinct reversal in FII activity over the last three trading sessions, culminating on April 17. During this period, there were net inflows amounting to 14,670 crore into the cash market. Vijayakumar explained that this reversal has been spurred by a weakening dollar index, along with expectations of further dollar depreciation, which is motivating FIIs to redirect their investments from the US to emerging markets like India.

Furthermore, Indias robust growth outlookprojected at an impressive 6 percent for the fiscal year 2026, even amid global uncertaintiespositions the nation favorably for potential market outperformance in the coming months. In the previous week, which was shortened by public holidays, the benchmark BSE Sensex experienced a significant surge, climbing 3,395.94 points or 4.51 percent, while the NSE Nifty also enjoyed a rally, gaining 1,023.1 points or 4.48 percent, reflecting strong investor optimism.

Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, commented on the markets trajectory, suggesting that the gradual upward trend could persist. This optimism is supported by factors such as easing domestic inflation rates, a favorable monsoon forecast issued by the Indian Meteorological Department (IMD), and sustained interest from foreign institutional investors. Nevertheless, analysts have sounded a note of caution, indicating that any adverse surprise pertaining to US tariffs could induce volatility in global markets. As such, this remains a pivotal risk factor that investors will need to monitor closely in the week ahead.