The Nifty 50 and Sensex indices remained under pressure on Monday as traders awaited key earnings and macroeconomic events. The Nifty index fell to ₹24,800, its lowest point since June 19, while the Sensex dropped to ₹81,370. This article explores some of the top catalysts for these blue-chip indices this week.
India and the US trade deal
The most important catalyst for the Nifty 50 and the Sensex Index will be the upcoming deadline of tariffs between the United States and India.
Trump initially announced a 26% tariff on Indian goods during his Liberation Day speech in August. He then extended the pause to August , when the new tariffs will kick in.
These tariffs will disrupt a major trade relationship worth over $128.5 billion a year. The US exported goods worth over $47.2 billion to India and then bought goods worth over $85.5 billion. As a result, the US had a trade deficit worth over $38.4 billion last year.
Analysts anticipate that the two sides will reach a deal in the next few days. Such a deal will mirror those made with Japan and the European Union. In these deals, the US will impose 15% tariffs and then receive investments worth billions of dollars.
In Japan’s case, the country will invest $550 billion in the US, while the European deal will have its members purchase $750 billion worth of American energy and invest $600 billion in the US. EU member states will also buy “vast amounts” of US military equipment.
Indian corporate earnings ahead
The next key catalyst for the Nifty 50 and BSE Sensex indices will be the upcoming earnings by some of the biggest companies. Already, some of the top companies, including Indian banks, have published their financial results.
Vedanta and IndusInd Bank will be the top Nifty 50 companies that will publish their financial results on Monday. IndusInd Bank share price has plunged by over 50% from its highest point last year.
The other top Nifty 50 Index companies that will publish their earnings this wek are Larsen & Toubro, NTPC, Power Grid, Hindustan Unilver, Adani Enterprises, Sun Pharmaceuticals, Mahindra & Mahindra, Coal India, ITC, and Britannia Industries.
US earnings and Federal Reserve decision
The Nifty 50 and BSE Sensex will also react to the upcoming US earnings season, where some of the biggest companies, such as Amazon, Meta Platforms, and Apple, will report their results. Over 50% of all companies in the S&P 500 Index will publish their earnings this week.
At the same time, the Federal Reserve will publish the July interest rate decision on Wednesday. Economists expect the bank to maintain interest rates unchanged between 4.25% and 4.50%.
Historically, US earnings season and FOMC decision tend to have an impact on global assets, including Indian stocks.
Nifty 50 Index analysis
The weekly chart shows that the Nifty 50 Index has been under pressure in the past few months. It has retreated in the last four consecutive weeks and even formed a double-top pattern with a neckline at ₹21,730, its lowest point in April.
A double-top is one of the most bearish patterns in technical analysis. At the same time, the Relative Strength Index (RSI) and the MACD have all turned downwards.
Therefore, the index will likely continue falling as sellers target the key support at ₹24,000. A move above the resistance at ₹25,720 will invalidate the bearish outlook.
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