Market Outlook for Next Week: Key Factors Influencing Stocks, Including Trump’s Inauguration and Q3 Results

As the market heads into next week, several key factors are expected to shape investor sentiment and trading activity.

The inauguration of Donald Trump as the 47th U.S. President, quarterly earnings reports, foreign institutional investor (FII) movements, the performance of the rupee against the dollar, and global crude oil prices will all be pivotal in driving market dynamics.

The Donald Trump Factor: Inauguration and Policy Expectations

On January 20, Donald Trump will officially be sworn in as the President of the United States. This event has captured the attention of global markets, with investors eager to see how Trump’s policies and remarks on key issues, particularly tariffs, will affect economic conditions.

Experts suggest that the first few weeks of Trump’s presidency may bring heightened volatility in the global market as the new administration’s policy decisions start to take shape.

In particular, investors are keeping a close watch on the potential impact of any tariff announcements, which could influence trade relations and market stability. Given the current global market uncertainty, it’s expected that Trump’s policies, particularly regarding trade and tariffs, could influence market trends in the coming weeks.

Q3 FY25 Results: Earnings Season Continues

Next week will also see over 240 companies release their third-quarter earnings results for the financial year 2025. Investors will be closely monitoring the performance of key companies, as their results could provide important insights into market health.

Some of the major companies scheduled to announce their earnings include Adani Green Energy, HDFC Bank, Paytm (One 97 Communications), Zomato, IDBI Bank, Indian Overseas Bank, Tata Technologies, Bharat Petroleum Corporation, and Indigo.

Earnings reports from these industry leaders are likely to set the tone for the broader market, with a focus on growth rates, profitability, and forward-looking guidance. Positive results from these companies may offer some relief and support to the market, especially amid broader economic concerns.

Primary Market: IPO Activity and Investor Focus

The primary market will also be active next week, with four new IPOs opening for subscription. Three of these will be from the small and medium enterprises (SME) sector, which has been growing in popularity among investors seeking exposure to emerging companies.

The IPO market is expected to attract attention, particularly from those looking for diversification opportunities and high-growth potential.

While the market’s focus will be on earnings, the performance of the IPOs will also be watched closely, as they may reflect broader market sentiment and investor confidence.

Also Read | Indian Stock Market Ends Lower After 3-Day Gains, Nifty Below 23,250

Market Performance: Nifty and Sensex Show Declines

The Indian stock market experienced a decline from January 13 to January 17, with key indices facing selling pressure.

The Nifty 50 index fell by 228.30 points (0.97 percent) to close at 23,203.20, while the Sensex dropped by 759.58 points (0.98 percent), settling at 76,619.33. The Nifty Bank index also recorded a decline, falling by 0.40 percent to close at 48,540.60.

Throughout the week, Nifty Midcap stocks experienced volatility, ending the week with a marginal gain of 0.04 percent, closing at 54,607.65. Despite the small gains, overall sentiment remained bearish as the broader market continued to experience a downturn.

Technical Analysis: Bearish Sentiment and Potential Reversal

The Nifty 50 index has been trading below its 21-week and daily exponential moving averages, signaling a bearish trend in the market. Additionally, the index has slipped under the ascending trendline, a sign that market sentiment may remain negative unless there is a reversal in the near future.

However, experts believe that there could be a potential buying opportunity if the Nifty index reclaims the 23,400 mark. Should this happen, the index could test the next resistance level at 23,700, providing some optimism for traders looking for a short-term bounce.

Foreign Institutional Investors (FII) and Domestic Flows

Foreign institutional investors (FIIs) have continued to sell Indian equities, with net sales of Rs 3,318.06 crore on January 17 alone. So far in January, FIIs have offloaded Indian stocks worth Rs 44,396 crore, contributing to the overall negative sentiment in the market.

In contrast, domestic institutional investors (DIIs) have been active buyers, purchasing shares worth Rs 2,572.88 crore on the same day. Despite the FII outflows, DIIs have remained supportive of the market, helping to offset some of the selling pressure from foreign investors.

Global Economic Factors: Crude Oil Prices and Inflation Concerns

Crude oil prices will continue to be a key factor influencing market conditions, particularly for sectors such as energy, transportation, and manufacturing.

Investors will keep an eye on global oil price movements, as any significant changes could have ripple effects across the economy.

Additionally, experts have expressed concern about higher inflation in Japan, which could lead to tighter monetary policies from the Bank of Japan (BoJ). This could weigh on market sentiment, particularly if other global central banks follow suit with more restrictive policies