Q1 earnings, US Fed interest rate decision to drive market sentiments this week: Analysts

New Delhi: Stock markets are in for an event-heavy week ahead with a raft of Q1 earnings from blue-chips, the US Fed interest rate decision and foreign investors trading activity driving investors' sentiment, analysts said.

Macroeconomic data announcements, monthly auto sales numbers and global market trends would also guide movement in the domestic equities, they said.

Markets would also keep a track on developments related to the August 1 trade deal deadline and geopolitical tensions between Thailand and Cambodia.

August 1 marks the end of the suspension period of Trump tariffs imposed on dozens of countries, including India.

"The start of the new month will bring attention to key economic data, including Industrial Production (IIP) and HSBC Manufacturing PMI on August 1. Additionally, monthly auto sales figures will be closely monitored. The scheduled expiry of the July derivatives contracts may add further volatility to the markets," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

As the earnings season progresses, results from heavyweights such as IndusInd Bank, Asian Paints, NTPC, Tata Steel, Hindustan Unilever, Mahindra & Mahindra, Maruti Suzuki, Sun Pharma, ITC, and others will be tracked for insights on sectoral resilience and corporate performance, he said.

Globally, traders will focus on the US Fed's interest rate decision and GDP growth numbers, along with updates on trade negotiations ahead of Trump's August 1 tariff deadline, which could impact FII flows, Mishra added.

Movement of rupee against the dollar and crude oil prices will also be monitored by investors.

"Looking ahead, all eyes are now on the upcoming Q1 earnings reports from several key companies. Major names like Bharat Electronics Ltd, IndusInd Bank, Asian Paints, Tata Steel, Mahindra & Mahindra, Coal India, Hindustan Unilever, Maruti Suzuki and ITC are set to announce their results this week. Their performance will be crucial in determining whether markets can find support or continue to trend lower in the near term," Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said.

Investors will closely monitor foreign fund flows, and any meaningful development on the India–US trade front for further direction, he added.

Last week, the BSE benchmark gauge declined 294.64 points or 0.36 per cent, and the Nifty dipped 131.4 points or 0.52 per cent.

"The Indian stock market continued its downward trajectory for the fourth consecutive week, marking the longest losing streak for the Nifty since October 2024. Investor sentiment remained weak, primarily due to the absence of strong domestic triggers, tepid corporate earnings for the June quarter, and persistent selling by foreign institutional investors (FIIs)," Gour said.

Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, we expect markets to remain in consolidation mode amid continued uncertainty around India-US trade deal, a mixed Q1 FY26 earnings season so far and intensifying FII outflows.