As Dalal Street enters a crucial week, investors will keep a close watch on global economic events, particularly the monetary policy decisions from major central banks, including the US Federal Reserve (FOMC), the Bank of England (BoE), and the Bank of Japan (BoJ). Additionally, domestic inflation data, global trade war developments, and China’s economic indicators will play a key role in shaping market sentiment.

Here are the 10 key factors that will influence market trends in the coming week:

1. US Federal Reserve’s Interest Rate Decision & FOMC Outlook

The biggest event on the radar will be the Fed’s interest rate decision. While the central bank is widely expected to maintain the current rates, investors will closely analyze Fed Chair Jerome Powell’s remarks and the FOMC’s economic projections for hints on future rate cuts. Any dovish signals could boost market sentiment, while a cautious stance may lead to volatility.

2. Bank of England (BoE) Policy Meeting

The BoE is also set to announce its interest rate decision this week. With inflationary pressures still a concern in the UK, the central bank is likely to keep rates unchanged. However, any hawkish comments on inflation control or future tightening could impact global investor sentiment.

3. Bank of Japan (BoJ) Policy Decision

The BoJ’s stance will be keenly watched, as markets speculate on when Japan will exit its ultra-loose monetary policy. Any shift toward tightening or policy adjustments could impact currency markets and influence global equity flows.

4. India’s Wholesale Price Index (WPI) Inflation Data

Domestically, India’s WPI inflation data will be released this week. Given the recent uptick in consumer inflation (CPI), WPI figures will provide further clarity on the inflation trajectory. Higher-than-expected inflation could fuel concerns over RBI’s rate-cut timeline, affecting market sentiment.

5. Global Trade War Developments

Trade tensions between major economies, particularly the US and China, remain a key risk factor. Any escalation or resolution in trade disputes could influence global markets, especially in sectors like IT, metals, and auto, which have significant export exposure.

6. China’s Retail Sales & Industrial Production Data

China’s economic health remains a major driver for global markets. The upcoming retail sales and industrial production data for the last two months will provide insights into the strength of the world’s second-largest economy. A weaker-than-expected reading could weigh on metal and commodity stocks.

7. Foreign Institutional Investors (FII) and Domestic Institutional Investors (DII) Flows

Market movements will be influenced by FII and DII activity. Lately, FIIs have been cautious amid global uncertainty, while DIIs have provided support. A shift in buying or selling patterns by institutional investors will be closely monitored.

8. US Dollar and Crude Oil Prices

The movement of the US dollar index and crude oil prices will have a significant impact on Indian markets. A strong dollar could weigh on emerging market currencies, while volatile crude prices could impact oil-sensitive sectors such as airlines, paints, and logistics.

9. Corporate Earnings & Management Commentary

Although the earnings season is winding down, management commentary from key companies will be crucial in assessing business outlooks. Sectors such as banking, IT, and FMCG will be closely watched for demand trends and margin pressures.

10. Technical and Derivative Indicators

The market is expected to remain rangebound, with Nifty and Sensex reacting to global cues. Traders will track open interest data, put-call ratios, and resistance levels to gauge short-term movements. Any breakout or breakdown from key levels could trigger significant moves.

Conclusion

With multiple high-impact global and domestic events lined up, Dalal Street is expected to witness cautious trading with potential volatility. While the market may remain rangebound, investor sentiment will largely be dictated by central bank decisions and macroeconomic indicators. Traders should keep a close eye on global cues, institutional flows, and technical levels to navigate the upcoming week successfully.