Week Ahead: After weak earnings, market focus shifts to foreign flows and US policy cues

The focus of stock markets this week will shift to global developments and foreign investor activity after a challenging earnings season wrapped up, analysts noted.  

Market sentiment remained under pressure last week, driven by weak quarterly earnings, continued foreign fund outflows, and concerns over US trade policies. Benchmark indices Sensex and Nifty extended their losing streak to the eighth consecutive session on February 7. The BSE Sensex plunged 2,644.6 points, or 3.36%, while the NSE Nifty fell 810 points, or 3.41%, over the last eight trading days.  

“With the conclusion of the Q3 earnings season, now focus will be on global developments amid a turbulent market environment on account of Donald Trump’s trade policies,” said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd.  

Additionally, the movement of the rupee against the dollar and fluctuations in Brent crude prices will be closely monitored by investors.  

Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, said, “With the earnings season behind us, market focus will shift to trends in FII flows and currency movements for further cues. Additionally, speculation regarding US tariffs and their impact on global trade will remain a key factor to watch.”  

Investors will also pay attention to the minutes from the US Federal Open Market Committee (FOMC) meeting scheduled for this week.  

“In the absence of key domestic triggers, global developments are more likely to provide impetus in setting up our market tone,” noted Osho Krishan, Senior Analyst at Angel One Ltd.  

Several factors contributed to the recent market downturn. “Sentiment was particularly rattled by US President Donald Trump’s announcement of reciprocal tariffs on US trading partners. Additionally, weak Q3 corporate earnings and sustained FII outflows further weighed on investor confidence,” said Puneet Singhania, Director at Master Trust Group.