Quarterly earnings, crude prices, geopolitical uncertainties to dictate market trends this week: Analysts

New Delhi: The ongoing second quarter earnings, movement of oil benchmark Brent crude and the uncertainty in the Middle East would dictate terms in the domestic markets this week, analysts said.

Furthermore, the activities of Foreign Institutional Investors (FIIs) will also influence trading in the markets. "A slew of earnings reports from heavyweights expected this week will significantly impact market direction. The activities of Foreign Institutional Investors (FIIs) will be important, given their recent consistent selling streak," Santosh Meena, Head of Research, Swastika Investmart Ltd.

Foreign investorshave pulled out nearly Rs 9,800 crore from Indian equities this month so far owing to a sustained rise in US bond yields and the uncertain environment resulting from the Israel-Hamas conflict. It was a tumultuous week in the market, marked by significant events and high volatility. Despite this, the market closed on a positive note, largely attributed to strong domestic liquidity. Last week, the BSE benchmark climbed 287.11 points or 0.43 per cent.

"The Indian market rebounded from the sluggish start, propelled by positive expectations on Q2 earnings and moderation in global bond yield despite concerns over the Middle East conflict continues to hover. "However, the release of higher-than-anticipated US inflation data and resulting increase in treasury yields marginally offset the positive trend by the end of the week," Vinod Nair, Head of Research at Geojit Financial Services, said.

On the macroeconomic front, domestic factors such as a significant drop in Consumer Price Index (CPI) data and impressive industrial production helped to sustain the broad optimism, Nair added. According to official data, the country's retail inflation rates moderated to a three-month low of 5 per cent in September while factory output soared to a 14-month high of 10.4 per cent. However, a weak start to the result season by IT sector's subdued revenue guidance, combined with uptick in crude oil prices affected the broad market trend, Nair noted.

Looking ahead, investors will closely monitor the further commencement of the second quarter earnings season, which has high expectations from sectors like Auto, Finance and Oil & Gas, Nair said. Further, the speech by US Fed Chair Jerome Powell on October 19, will also be an important factor to focus on, as the Federal Reserve is still in favour of one more rate hike by the end of this year to tame inflation.