Choppy Week Ahead: Indian Equity Markets Brace for US Trade Tensions and Key Inflation Data

Indian equity markets are expected to see a turbulent week as investors brace for developments in US-India trade tensions alongside the release of key domestic inflation figures for July. The cautious sentiment follows a sixth consecutive week of declines in benchmark indices, with the Sensex and Nifty ending lower amid persistent selling pressures.

The week concluded with the BSE Sensex declining by 1.01% to 79,857.79, while the NSE Nifty dropped 1.20% to 24,363.30. Market sentiment soured further after US President Donald Trump announced a 50% tariff on Indian goods, unsettling investors and impacting export-focused sectors. "The sudden escalation in US tariffs was the dominant driver of the week's decline," said Ajit Mishra, Senior VP - Research at Religare Broking Ltd.

Investors and analysts are keenly awaiting India's Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation data. Additionally, global developments regarding US-India trade discussions will be under close scrutiny. With the fading earnings season, pivotal results from companies like Ashok Leyland, ONGC, and Hindalco Industries could trigger stock-specific movements. "Equities are likely to remain in consolidation mode until clarity emerges on trade tariffs," noted Siddhartha Khemka of Motilal Oswal Financial Services.

(With inputs from agencies.)