The Bull, the Bear, and the Fed: Key Market Triggers to Watch This Week

Mumbai, 5 May – Indian equities closed last week with modest gains, demonstrating notable resilience amid a globally volatile backdrop. The NIFTY50 hovered below the 24,000 mark, supported by robust corporate earnings, sustained foreign inflows, and easing pressure from a subdued dollar index.

This strength held even as markets digested a host of headwinds — escalating trade tensions, geopolitical unease in South Asia, and a discernible uptick in volatility. Broader market participation, however, remained cautious. Large-cap stocks outperformed, while mid- and small-cap indices lagged, suggesting selective investor interest.

FIIs and DIIs: Strong Hands at Play

Foreign Institutional Investors (FIIs) maintained their buying momentum for a third consecutive week, reducing bearish bets in index futures and buoying sentiment in the cash market. Domestic Institutional Investors (DIIs) were even more assertive, ramping up purchases.

Institutional Flow Snapshot

The decline in FII net short positions and the bettering long-to-short ratio—from 41:59 to 47:53—is indicative of increased confidence in Indian equities.

Market Breadth Holds, But Midcaps Signal Pause
While the NIFTY Midcap 100 rose a muted 0.4%, the Smallcap 100 fell 0.5%, showing investors’ caution in the face of an earnings-loaded week. Yet, more than 80% of NIFTY50 components were trading above their 50-day moving averages — a number that usually indicates underlying market resilience.

Sector Watch: Oil & Gas Shines, Durables Dip
Sectoral rotation was observed. Oil & Gas (+4.3%) and Real Estate (+2.5%) drove the rally, while Consumer Durables (-0.9%) and Metals (-0.6%) lagged behind. This indicates a move towards core economy and defensive plays in the backdrop of global uncertainty.

NIFTY50 in a Holding Pattern
Technically, the NIFTY50 is consolidating between the 24,500 and 23,800 range following an 11% rally from the April 2025 lows. A decisive close beyond this range will likely determine the near-term trajectory.

All Eyes on the Fed
The U.S. Federal Reserve meets this week, with interest rates expected to remain on hold. However, investors will closely monitor Chair Jerome Powell’s commentary for guidance on the policy path — particularly in light of persistent trade tensions and a softening labour market.

Additional cues will come from U.S. eeconomic indicators like the Services PMI and consumer sentiment survey. In the meantime, the latest 0.3% decline in Q1 GDP — the first since 2022 — has caught notice, while consumer spending stays firm at 1.8%.

Key Events to Watch
– Ather Energy IPO debuts Tuesday, drawing investor interest in India’s EV narrative.
– Corporate earnings from names like M&M, Asian Paints, Paytm, Titan, Dr. Reddy’s, and Dabur will shape sector sentiment.
– Global earnings from Uber, Palantir, and Walt Disney due mid-week.

Oil Prices Slide, Buffet Bows Out
Crude prices dropped over 8% last week after an unexpected OPEC+ production hike, pushing Brent below $62 per barrel. Meanwhile, Berkshire Hathaway’s 2025 AGM marked a generational shift as Warren Buffett announced his retirement as CEO, with Greg Abel named successor. Buffett struck a cautious note on AI and protectionist policies, while Berkshire’s cash reserves hit a record $347.7 billion — reflecting few attractive buying opportunities at current valuations.

Bottomline
Despite global turbulence, Indian markets are holding firm. The NIFTY50’s consolidation near record highs suggests resilience rather than exhaustion — so long as the index remains above 23,800. With sector leadership intact and institutional flows supportive, the next move hinges on global cues and domestic earnings momentum.