Data, Dollars, and Decisions: What Will Steer Dalal Street This Week |

Updated: January 04, 2026 21:22

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Indian stock markets this week will be guided by macroeconomic data, global cues, and FII trading activity. Analysts highlight PMI readings, US jobs data, and early Q3 earnings as key triggers. Despite global risks, India’s strong domestic fundamentals and resilient demand are expected to support market sentiment and sustain investor confidence.

Indian equity markets enter the first full trading week of January 2026 with analysts pointing to a mix of macroeconomic data releases, global cues, and foreign institutional investor (FII) activity as the key drivers of sentiment. After a strong start to the year, investors are now closely watching indicators that could set the tone for short-term market direction.

Key highlights shaping the week ahead include:

Domestic macroeconomic data: Investors will track the final readings of the HSBC Services PMI and Composite PMI, which provide insights into business activity, demand conditions, and employment trends in India’s services sector. These numbers are crucial as services account for a major share of the country’s GDP.
Global developments: Internationally, markets are awaiting US jobs data, inflation trends, and Chinese economic releases, which could influence global risk appetite. Analysts caution that any surprises in these figures may trigger volatility across emerging markets, including India.
FII trading activity: Foreign investors have been net sellers in recent sessions, while domestic institutional investors (DIIs) continue to provide support. The balance between FII outflows and DII inflows will be closely watched as it directly impacts liquidity and market momentum.
Corporate earnings season: The early phase of Q3 FY26 earnings begins this week, with results from key sectors expected to provide clarity on profitability trends. Analysts believe earnings delivery will be a decisive factor in sustaining the rally.
Market outlook: Despite global uncertainties, experts remain optimistic about India’s strong domestic fundamentals, resilient demand, and supportive policy environment. Kotak Securities has projected a base-case Nifty target of 29,120 by December 2026, citing GST rationalisation, potential interest rate cuts, and benign inflation as tailwinds.

Overall, the week is expected to be data-heavy and event-driven, with traders advised to stay cautious yet optimistic. While global risks remain fluid, India’s structural growth story and improving earnings visibility are seen as buffers against external shocks.

Sources: Free Press Journal, Outlook Business, Fortune India

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