The Indian stock market is entering the new week with a careful approach. Investors are watching several key factors. The main focus is on the third-quarter earnings reports, gold and silver prices, and the progress of the India-US trade deal. After a volatile start to the year, the market is looking for direction.
Last week, the Sensex and Nifty 50 managed to end their two-day losing streak. The Sensex rose by 188 points to close at 83,570.35. The Nifty 50 added 29 points to finish at 25,694.35. This recovery was mainly driven by IT giants like Infosys, TCS, and Tech Mahindra. Banks also helped the market move higher.
Ajit Mishra from Religare Broking noted that the market stayed mostly range-bound after a volatile start. Broader indices followed the main benchmarks and ended with modest gains. Now, all eyes are on what comes next.
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Q3 Results Take Center Stage
The second week of the earnings season is here. This is a critical time for the Indian stock market. Many large and mid-cap companies are set to announce their results for the December quarter. These results will give a clear picture of how corporate India is performing.
Banking stocks will be in the spotlight. Heavyweights like HDFC Bank and ICICI Bank are among the key players reporting earnings this week. Other notable companies include IRFC, Eternal (Zomato), InterGlobe Aviation (IndiGo), BHEL, Coforge, JSW Steel, BPCL, and Cipla.
Investors will react strongly to these numbers. The performance of these companies will set the tone for the market. If results are strong, it could boost investor confidence. If they fall short, the market might face pressure.
India-US Trade Deal Uncertainty
The ongoing trade negotiations between India and the US remain a major concern. There is still a 50% tariff on Indian imports, which weighs on market sentiment. This uncertainty is keeping investors cautious.
Recently, two US lawmakers asked President Trump to push for better terms for pulse crops in any trade deal with India. Senators Steve Daines and Kevin Cramer argued that US farmers are at a disadvantage due to what they call “unfair” tariffs by India. This adds another layer of complexity to the talks.
However, there is a silver lining. The India-EU trade agreement is expected to be finalized later this month. If concluded, this could provide a positive boost to investor confidence. For now, the market is waiting for clear signals on the US deal.
Gold and Silver Rates Impact
Precious metals have been under pressure recently. A strong US dollar and easing tensions between the US and Iran have weighed on gold and silver prices. This matters for the stock market because money flows between asset classes.
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Anuj Gupta, a SEBI-registered analyst, explained that if gold and silver prices cool down, investors might shift funds from bullions to equities. This could provide fresh liquidity to the stock market.
Currently, spot gold is trading around $4,610 an ounce. Silver is at $90.82 an ounce. Both metals hit record highs recently but have corrected slightly. Their movement will be closely monitored this week.
Foreign Investors Continue to Sell
Foreign Institutional Investors (FIIs) have been net sellers in the market. Data shows that FIIs sold equities worth ₹22,529 crore in January up to the 16th. They were sellers on all days except one.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, pointed out that India’s market performance has been weaker compared to other global markets in early 2026. The Nifty’s year-to-date return is negative at -1.73%.
The main reasons for this selling include poor earnings growth and high valuations in India. The suspense over the US-India trade agreement is also affecting sentiment. Dr. Vijayakumar believes the selling trend might continue until positive triggers emerge.
US Economic Data and Global Cues
Global factors will also play a big role. Key US economic data is due this week, including GDP growth, inflation trends, jobless claims, and PMI readings. These numbers will influence global risk sentiment and currency movements.
Any sign of weakness in the US economy could impact global markets, including India. Conversely, strong data might strengthen the US dollar further, putting pressure on emerging markets.
Technical Outlook for Nifty and Bank Nifty
The technical charts suggest a cautious outlook. According to Ajit Mishra, the Nifty 50 is hovering near its 100-day exponential moving average (DEMA). This indicates a tug-of-war between buyers and sellers.
A decisive break below the 100 DEMA could lead to further downside. The Nifty might fall towards 25,300, and then to key long-term support near 25,150 (200 DEMA). On the upside, resistance is seen in the 25,900–26,000 zone. A move above 26,200 seems tough right now.
Bank Nifty is showing relative strength. It is holding above its short-term moving average, the 20 DEMA. Immediate support for Bank Nifty is at 59,200, with a stronger cushion at 58,700. The target range on the upside is 60,500–61,200.
Summary of Key Triggers
Here is a quick look at the top five triggers for the Indian stock market this week:
| Trigger | Description | Potential Impact |
| Q3 Earnings | Results from HDFC Bank, ICICI Bank, Reliance, BPCL, and others. | Strong results can lift the market; weak results may cause a sell-off. |
| India-US Trade Deal | Uncertainty continues regarding tariffs and terms. US senators have raised concerns about pulse crops. | Negative sentiment if talks stall; positive if a deal moves forward. |
| Gold & Silver Prices | Metals are under pressure due to a strong dollar. Investors may shift to equities if prices fall further. | Lower bullion prices could bring money into stocks. |
| FII Activity | FIIs have been consistent sellers in January 2026. | Continued selling can cap market upside. |
| US Economic Data | GDP, PMI, and jobless claims data due this week. | Strong data supports global sentiment; weak data could trigger volatility. |
What Investors Should Watch
Investors should remain vigilant this week. The market is likely to move based on stock-specific actions rather than a broad rally. Earnings results will be the primary driver.
Keep an eye on global developments. Any news on the India-US trade deal or geopolitical tensions (like US-Iran rhetoric) could cause sudden swings in oil prices and equity markets.
The trend of FII selling is a concern. However, domestic institutional investors (DIIs) have been supporting the market. In 2025, DIIs invested heavily, offsetting FII selling. This trend could continue if the market dips.
The AI trade theme that dominated 2025 is still in play in early 2026. Tech stocks might continue to show strength, but valuations are a factor to watch.
FAQ Section
Q1: What is the current outlook for the Indian stock market?
The outlook is cautious. The market is waiting for Q3 earnings results, clarity on the India-US trade deal, and global cues.
Q2: How are gold and silver prices affecting the stock market?
Gold and silver prices have come down from record highs. If they continue to fall, money might move from precious metals to stocks, which is a positive sign for the market.
Q3: Why are FIIs selling Indian stocks?
FIIs are selling due to high valuations, poor earnings growth in India, and uncertainty over the US-India trade deal. They are also shifting funds to other markets that look cheaper.
Q4: Which sectors are in focus this week?
Banking, IT, and oil & gas sectors are in focus due to Q3 results. Auto and infrastructure companies like IndiGo and IRFC are also reporting.
Q5: What is the technical level for Nifty 50?
The Nifty is near the 100 DEMA. A break below 25,300 could lead to 25,150. Upside resistance is at 25,900-26,000.
Q6: Is the India-EU trade deal important?
Yes, it is expected to be concluded this month. A successful deal could improve investor sentiment and offset some negativity from the US trade talks.
Q7: Should investors buy now?
It is best to wait for clarity on earnings and trade deals. Adopt a stock-specific approach rather than taking broad market bets.
Conclusion
The Indian stock market is at a crucial juncture. The coming week will be defined by corporate earnings and global negotiations. While IT stocks provided relief last week, the broader sentiment remains fragile.
Traders and investors should watch the performance of banking heavyweights. The outcome of the India-US trade talks will be a make-or-break factor for the medium-term outlook. For now, the advice is to stay selective and manage risk carefully.
Global cues from the US and commodity price movements will add to the volatility. A clear direction will likely emerge only after these key events unfold.
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