Market watch: Global economic events, US trade talks outcome to drive market sentiment

Market experts suggest that investor sentiment could be significantly influenced by economic indicators, particularly the outcome of ongoing trade deal discussions between India and the US, which are being closely monitored for signs of progress.

"The week from 28 July to 01 August 2025 is packed with key economic events across the United States, India, and China, which could significantly influence global market sentiment," the Bajaj Broking Research team said in its weekly market note.

Meanwhile, experts say that positive surprises from the first-quarter financial season could positively shape sentiment.

"At this stage, any positive development on the global front, particularly around trade negotiations involving the US, could act as a much-needed catalyst for the market. A constructive outcome or even signs of progress in trade talks would help ease investor concerns. Also, from the remainder of Quarterly Results, any positive surprise could also lead to providing support at lower levels," said Sudeep Shah, Head - Technical and Derivatives Research, SBI Securities.

In India, the economic week begins with the release of the Industrial Production YoY data on 28 July, which will help assess the strength of the country's industrial sector.

This will be followed by the HSBC India Manufacturing PMI on August 1, which will offer insights into factory output and business conditions in the manufacturing sector.

Meanwhile, China will release its Manufacturing PMI data on 31 July, an important indicator of industrial activity and business confidence in the region.

In the United States, attention will be firmly on the Federal Reserve's FOMC rate decision, scheduled for July 30, a critical event that could shape expectations around interest rate policy amid persistent inflation concerns.

Alongside this, the GDP Annualised QoQ and ADP Employment Change data will also be released on the same day, offering a glimpse into the economic growth trajectory and private sector hiring trends. On 31 July, the Initial Jobless Claims report will provide further clarity on the health of the labour market.

The benchmark Nifty index has continued its downward trajectory, extending its losing streak for the fourth consecutive week.

The analysts stated that the persistent weakness in the market can be attributed to a combination of factors, including the absence of strong positive triggers, Q1 earnings from key corporates coming in below expectations, and lingering uncertainty on the global trade deal front, all of which have dampened investor sentiment.

During the week, the index made a feeble attempt to rebound from the crucial support zone; however, the recovery lacked conviction and fizzled out quickly.

On Wednesday, Nifty managed to close above its 20-day EMA, briefly reviving hopes of a turnaround. But the optimism was short-lived, as renewed selling pressure dragged the index back into negative territory.

The earnings season so far has largely fallen short of expectations, with several major companies reporting weaker-than-anticipated results. This underperformance has dampened investor sentiment, particularly at a time when markets were expecting strong earnings to serve as a key catalyst for upward momentum.

Beyond earnings, the absence of any significant positive domestic triggers and the continued uncertainty surrounding global trade negotiations have added to the cautious mood. These combined factors are contributing to the downward pressure on the market, according to the market analysts.

While weak earnings alone may not be the sole reason for the market correction, when coupled with global headwinds and a lack of fresh buying triggers, they certainly add weight to the bearish undertone prevailing in the current environment. (ANI)