Key factors that could impact Indian stock market this week
What's the story
As the week starting January 12 begins, investors are advised to keep an eye on several key factors that could influence the Indian stock market. These include corporate earnings from index heavyweights, inflation data for India and the US, foreign institutional investors' (FIIs) sentiment, and expectations from Union Budget 2026. Sensex and Nifty, have continued their losing streak for the sixth consecutive session. The Sensex fell by 650 points to 82,926 while the Nifty slipped below the 25,500 mark today.
Market forecast
Market outlook and external risks
Vinod Nair, Head of Research at Geojit Investments, predicts that "markets are expected to stay range-bound with a mixed bias." He believes the balance between external risks and domestic fundamentals will determine market direction. Nair also anticipates continued volatility in the near term, especially for US-exposed companies and sectors such as metals and oil & gas. However, strong domestic fundamentals could support selective buying where earnings prospects remain favorable.
Earnings season
Corporate earnings and inflation data to watch
This week, the much-awaited December quarter earnings season (Q3FY26) will be in full swing. Top IT companies such as Tata Consultancy Services, Infosys, HCL Technologies, Tech Mahindra, and Wipro are among 120 companies releasing their quarterly scorecards. The market will also focus on inflation numbers for December, scheduled for today followed by WPI inflation on January 14 and balance of trade and unemployment rate data on January 15.
International focus
Global economic data and FII activity
Globally, the market will look at US inflation numbers, a key factor for the US Federal Reserve's interest rate decision. Most economists expect inflation to rise to around 2.7% for December from 2.6% in November 2025. Other global data points include monthly industrial production and balance of trade data from Europe, PPI numbers from Japan, and vehicle sales & balance of trade for December from China.
Market movements
FII activity and IPOs to watch
The market will also keep an eye on FII activity as they were net sellers last week amid geopolitical tensions and renewed tariff concerns. FIIs have net sold shares worth ₹8,808 crore in the week ended January 9. Meanwhile, six companies are set to launch their IPOs worth over ₹2,000 crore this week with five firms making their market debut during this period.