Markets Brace for High-Stakes Week Amid RBI Policy, Q1 Earnings, and US Tariffs

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Indian stock markets are heading into a critical week, with investor sentiment riding on the Reserve Bank of India’s (RBI) policy decision, first-quarter earnings from key companies, and global developments, particularly surrounding new US tariffs. Analysts suggest that foreign investor flows and global equity cues will also steer market momentum, with additional volatility expected from geopolitical and macroeconomic triggers.

Last week, markets remained under pressure due to continued selling by foreign institutional investors (FIIs) and renewed trade tensions. The Sensex dropped 863.18 points (1.05%), while the Nifty declined by 271.65 points (1.09%). Friday’s trading session alone saw the Sensex fall 585.67 points to 80,599.91 and the Nifty retreat 203 points to 24,565.35, closing the week on a disappointing note.

Ajit Mishra, SVP – Research at Religare Broking, emphasized the importance of the RBI’s monetary policy on August 6. “All eyes will be on its commentary on inflation, liquidity, and growth,” he said, adding that earnings from heavyweights such as Bharti Airtel, DLF, Bajaj Auto, Hero MotoCorp, Tata Motors, SBI, and LIC will shape sectoral movements.

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Other macroeconomic triggers include HSBC’s PMI data, oil prices, and updates from US-India trade talks. The abrupt imposition of a 25% tariff by US President Donald Trump on Indian goods, alongside penalties on India’s energy and defence trade with Russia, has added to market anxieties.

Despite the headwinds, experts remain cautiously optimistic. VK Vijayakumar of Geojit Financial Services believes an agreement between India and the US is likely, while Motilal Oswal’s Siddhartha Khemka warned that mixed earnings and continued FII outflows may keep markets range-bound. Global rate decisions and PMI data will remain key focus areas in the days ahead.