The second quarter earnings season is coming to an end: six factors will decide where Nifty goes this week

Markets have been strong over the past week, mainly on favorable domestic cues, with Nifty gaining over one and a half percent, just below the coveted 26,000 mark. Inflation pressures reached a ten-year low of 0.25%, boosting investor confidence. The wins also ensured that a number of specific actions remained intact. Now that the season has come to an end, analysts see the market returning to its usual directions. These include macro data points, geopolitical developments and all news related to the India-US tariff resolution.Here are six factors that will decide where Nifty goes in the coming days.

1) Technical momentumTechnically, the Nifty has been consolidating for almost four weeks and now looks set to surpass its immediate hurdle of 26,100. Analysts say a breakout could open the way to the record high of 26,277 and then 26,500. “On the other hand, 25,650, the 20-DEMA zone, is acting as crucial support, followed by 25,400,” said Ajit Mishra of Religare Broking.For Bank Nifty, the banking index touched a new lifetime high during the week and continues to show strong momentum. “The setup indicates a gradual move towards the 59,500-60,500 zone. Immediate support is in the 57,200-57,700 range,” Mishra said.

2) Mixed performance in the second quarter

Second quarter earnings showed moderate trends in mass consumption, an uptick in select discretionary segments, modest demand for IT services and moderate credit growth for banks. The after-effects of the quarterly results are likely to manifest themselves this week, with investors hunting for quality stocks after analyzing the performance of various companies and sectors. For example, the performance of the metals and mining and oil marketing companies was better than estimated, analysts say, and these stocks should see some action.3) FII flows

FII remained net sellers in the month of November and the outflows have only increased in the past few days. The total outflows stood at Rs 13,925 crore this month. However, the long-term trend of FII purchases through the primary market continues with an investment of Rs 7,833 crores so far in November.

For 2025, the total FII sales figure through exchanges so far stands at Rs 2.08 lakh crore. And the total purchase figure for the primary market stands at Rs 62,125 crore.

“India’s underperformance against other markets has accelerated the momentum of sales trading in India and buying trades in other markets, especially those of the US, China, Taiwan and South Korea, which are widely seen as the beneficiaries of the ongoing AI trade,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

However, Vijaykumar says this AI trade cannot continue for long as there are concerns of a bubble in AI stocks. “As the AI ​​trade loses momentum, India will attract an influx of FII. The timing of this is difficult to predict.”

4) Macro events

With earnings season behind us, investors will be able to draw support from a host of macro events and data for any high-frequency indicators released.

5) Global factors

Global market sentiment will be determined by key US economic releases, including the minutes of the latest FOMC meeting. Additional,

continued volatility in AI-linked stocks will remain an important factor to watch given its potential to impact broader market sentiment.

6) Possible announcement of a trade deal between India and the US

There is a lot of buzz on the streets that a trade deal between India and the US will be announced soon. US President Donald Trump said earlier this week that his administration would reduce high tariffs against India. Analysts expect a possible announcement of a trade deal between India and the US to provide scope for a sharper rise in Nifty.

What should traders do?

The sharp decline in inflation, combined with stable macroeconomic fundamentals, provides a supportive environment for equities. “Investors should continue to adopt a stock-specific approach, with a preference for sectors that benefit from domestic demand. For traders, a buy-on-dips strategy remains beneficial as long as the Nifty remains above key support levels. With critical domestic and global macro data lined up, maintaining disciplined risk management, appropriate stop-loss levels and timely sector rotation will be essential,” Mishra said.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)