Amid global trade uncertainty, profit booking, and FPI outflows, Indian investors turn cautious ahead of key events including the US trade deadline, quarterly earnings season, and Fed minutes
July-6, 2025: As Dalal Street steps into a high-stakes week, a confluence of domestic and global triggers is set to influence Indian stock markets. From the looming India-US trade deal deadline to the beginning of the Q1FY26 earnings season and continued foreign capital outflows, investor sentiment will be tested across multiple fronts.
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Last week, the benchmark indices Nifty 50 and Sensex both shed 0.70%, breaking a two-week winning streak. The selloff was largely attributed to profit-taking and anxiety over the yet-to-be-finalized trade pact between New Delhi and Washington.
India-US Trade Deal: The Make-or-Break Moment
At the heart of the market’s caution lies the July 9 deadline set by US President Donald Trump for renegotiating trade terms. Though reports suggest the possibility of an interim arrangement, Commerce Minister Piyush Goyal reaffirmed India’s position — no deal will be signed unless it meets the nation’s strategic and economic interests.
A breakthrough could buoy sectors such as IT, pharma, and auto components, while a continued stalemate may spook markets in the short term.
“The most anticipated event is the outcome of the US trade deadline on July 9, which could shape global trade dynamics,” said Ajit Mishra, SVP at Religare Broking.
Q1FY26 Earnings Kick Off
India Inc. begins its Q1 earnings rollout this week, with TCS and Tata Elxsi leading on July 10, followed by DMart on July 11. Market participants will look closely at management commentary and growth guidance, especially in light of weak global cues and muted optimism.
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Positive surprises in earnings could offer respite from global headwinds.
Monsoon Watch: A Silver Lining?
June’s above-normal rainfall — 8.9% higher than average — has been a rare bright spot. It has already driven an 11% YoY increase in kharif crop sowing. The India Meteorological Department predicts continued monsoon activity across large parts of the country this week.
A robust monsoon could ease inflationary pressure and support rural demand — a critical element for sustained growth.
FPI Outflows: Worry Continues
Foreign investors have remained net sellers in Indian equities in July, with ₹5,773 crore pulled out from the cash segment. FPI behavior continues to be a barometer for market stability.
“FPI inflows will only resume meaningfully if the India-US trade deal is sealed and Q1 results show signs of earnings recovery,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Global Lens: US Fed Minutes in Focus
The FOMC minutes of the June 17–18 meeting, due this week, could offer clues into the Fed’s rate-cut timeline. Although a September rate cut is anticipated, the resilience in US jobs data gives the Fed the flexibility to delay easing.
Additionally, Fed Chair Jerome Powell has warned that new tariffs could soon start impacting US inflation — another factor that could influence the Fed’s stance.
Outlook:
With so many moving parts — domestic policy, global trade friction, corporate earnings, and macroeconomic data — volatility is likely to remain elevated this week. Investors should brace for swings as markets navigate this complex interplay of triggers.
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India US trade deal, Indian stock market, Dalal Street, Q1FY26 earnings, FPI flows, monsoon update, US Fed minutes, Sensex, Nifty 50, Trump tariffs, Piyush Goyal, Indian equities, global market triggers