Can Sensex and Nifty bounce back? 7 key factors that could shape market mood in coming week
According to The Economic Times, here are seven factors that could influence market action in the coming week:Infosys, Wipro ADRs rebound: Friday’s session offered relief for IT giants Infosys and Wipro, whose ADRs had dropped up to 14.5% over two days.
Bargain hunting at lower levels drove a sharp recovery, with Infosys rising 3% and Wipro gaining 4%, allowing both stocks to finish the week on a stronger note.US CPI data boosts rate cut expectations: Softer-than-expected US inflation lifted hopes of monetary easing.
The Consumer Price Index rose 2.4% year-on-year, slightly below the 2.5% forecast in a Reuters poll.
The moderation in inflation fueled market bets that the Federal Reserve could implement at least two rate cuts this year.
A White House spokesperson responded positively, suggesting that the American economy could gain further momentum if the Fed lowers interest rates.FIIs and AI-led disruption fears: According to VK Vijayakumar, chief investment strategist at Geojit Investments Limited, foreign institutional investors (FIIs) have remained net sellers this month, offloading Rs 1,374 crore so far.
The trend was heavily influenced by a sharp selloff of Rs 7,395 crore on February 13, when the Nifty fell 336 points amid heavy IT stock losses triggered by the Anthropic-related shock.Vijayakumar noted that market sentiment has improved following a “fiscally prudent and growth-oriented” 2026 Budget and the India–US trade agreement, with large-cap valuations appearing “fair” given the improving corporate earnings outlook for FY27.
He expects FIIs to return as buyers once volatility in the IT sector eases and added that any prolonged unwinding of the AI trade in the United States could further boost foreign flows into India, which he called a “non-AI market.“Rupee vs Dollar: The Indian rupee closed at Rs 90.64 per US dollar, largely unchanged from the previous close of Rs 90.59.
A stronger dollar can weigh on equities by prompting foreign fund outflows from emerging markets like India toward safer US assets.“USD/INR remains in a short-term corrective consolidation after rejecting recent highs but continues to trade comfortably above rising channel support near 90.20–90.40.
The 90.00 zone remains the structural pivot; as long as this base holds, the broader upward bias stays intact.
A consolidation phase seems likely before a renewed move toward 91.80–92.50, which in turn supports domestic bullion pricing dynamics,” said Ponmudi R, CEO of Enrich Money.Nifty shows weakness: The Nifty closed below 25,500, dropping amid IT stock losses.
It is now near key support at 25,400–25,300 (200-DMA/EMA), with a deeper floor around 25,200–25,000.
Immediate resistance is at 25,550–25,600, and a move above 25,700–25,800 could signal stabilization.
As long as 25,300 holds, the broader uptrend remains intact, but a breach could trigger further downside.Options data indicate a bearish bias, with aggressive call writing at higher strikes and put buildup at lower levels.
Near-term trading is expected between 25,200 and 25,700, favouring selective dip buying at strong support zones while tracking global cues.US GDP data next week: Investors will watch closely the minutes from the Federal Reserve’s latest policy meeting and the US GDP data for Q4, due next week.
These releases are expected to provide clearer signals on the Fed’s policy direction and near-term interest rate outlook.
For Indian markets, global cues carry extra weight, particularly amid volatile FPI flows.
Early inflow optimism was offset by sharp selling on the week’s final trading day during a global tech-led rout.Geopolitical tensions: Reuters reported that the American military is preparing for the possibility of “prolonged operations” against Iran if US President Donald Trump authorises military action against the Iranian regime, raising the risk of serious escalation.
This comes as US and Iranian representatives recently met in Oman to revive talks over Tehran’s nuclear programme, following a build-up of American forces in the region.
Meanwhile, the Pentagon has deployed an additional aircraft carrier, thousands of troops, fighter jets, and guided-missile destroyers to the Middle East, enhancing both offensive and defensive capabilities.
