As Indian markets gear up for a data-heavy week, experts say that the direction of the stock market will largely depend on the US Federal Reserve’s policy decision, March quarter corporate earnings, macroeconomic data, and the geopolitical tensions between India and Pakistan following the April 22 Pahalgam terror attack. 

In the past week, both the Sensex and Nifty rose for the third straight time, supported by strong foreign fund inflows, robust earnings from index heavyweights, and hopes of progress in the India-US trade deal. The benchmark Nifty index gained 307.35 points or 1.28 per cent to close at 24,346.70, while the Sensex jumped 1,289.46 points or 1.62 per cent to end the week at 80,501.99.

However, gains were slightly capped due to concerns over geopolitical developments after the terror attack in Jammu and Kashmir’s Pahalgam. Looking ahead, investors will be watching the US Federal Reserve’s monetary policy meeting scheduled for May 7.

The Fed is widely expected to keep interest rates unchanged for the third straight meeting at 4.25 – 4.50 per cent. Fed Chair Jerome Powell had earlier indicated two rate cuts in 2025, and also warned that US President Donald Trump’s tariff measures could push inflation higher and hurt employment.

Back home, the earnings season continues with key companies such as Mahindra and Mahindra, Coal India, Titan, Coforge, and Dr Reddy’s Labs set to release their Q4 results. On the economic front, market watchers will track the HSBC Composite PMI and Services PMI Final data for further cues on the country’s growth momentum.

Foreign investors have turned bullish on Indian equities. In the week ending May 2, foreign institutional investors (FIIs) bought stocks worth nearly Rs 7,680 crore in the cash market. This marks a significant reversal in trend, as FIIs had sold shares worth over Rs 1.29 lakh crore in the first three months of 2025.

Meanwhile, domestic institutional investors (DIIs) also supported the market with Rs 9,269 crore worth of investments.