The domestic stock market is expected to enter the week with a cautious outlook as investors digest ongoing uncertainties and await key developments. Last week saw volatile trading, largely due to profit-booking and uncertainty surrounding the progress of the India-U.S. trade agreement. With valuations currently elevated and delays in finalizing the trade deal, a period of short-term consolidation appears likely. Foreign Institutional Investors may reduce their positions in the domestic market amid this environment.
Despite these concerns, domestic factors provide some support. Strong macroeconomic indicators, solid corporate earnings, and forecasts of an above-normal monsoon season contribute positively to market sentiment. Additionally, investor expectations are building around a potentially record-high dividend payout from the Reserve Bank of India for the fiscal year 2025. This announcement, expected at the RBI’s board meeting on May 23, is viewed as a positive step toward fiscal consolidation and has already been reflected in declining Indian bond yields.
On the global front, rising U.S. bond yields and concerns over the United States’ growing debt burden have triggered recent foreign portfolio outflows, which may continue to influence market sentiment. Until greater clarity is achieved, investors are likely to maintain a cautious stance.
Domestic Cues:
India’s industrial production data for April is due on Wednesday, 28 May 2025. Industrial production in India increased 3% in March 2025 over the same month in the previous year.
India’s manufacturing production data for April is also set for release on Wednesday, 28 May 2025. Manufacturing Production in India increased 3% in March 2025 over the same month in the previous year.
India’s GDP growth rate for Q1 is scheduled for release on Friday, 30 May 2025. The Indian GDP expanded 6.2% from the previous year in the December quarter of 2024, picking up from the upwardly revised 5.6% expansion in the earlier period.
Global Cues:
The United States’ durable goods orders data for April is due on Tuesday, 27 May 2025. New orders for manufactured durable goods in the US increased 7.5% month-over-month in March 2025, revised down from initial estimates of a 9.2% surge.
The United States will release the FOMC minutes on Wednesday, 28 May 2025. The minutes will provide detailed insights into the Federal Reserve’s policy deliberations from the latest meeting.
Japan’s consumer confidence data for May is due on Thursday, 29 May 2025. Japan’s consumer confidence index fell to 31.2 in April 2025 from 34.1 in March, marking the fifth consecutive monthly decline and the lowest level since February 2023.
The United States’ second estimate for Q1 GDP growth rate is due on Thursday, 29 May 2025. The U.S. economy contracted at an annualized rate of 0.3% in the first quarter of 2025, marking the first decline since the first quarter of 2022.
The United States’ core PCE price index data for April is due on Friday, 30 May 2025. The core PCE price index in the US, which excludes volatile and energy prices and is Federal Reserve's chosen gauge of underlying inflation in the US economy, was unchanged from the previous month in March of 2025.
The United States’ personal income data for April is scheduled for release on Friday, 30 May 2025. US personal income rose by 0.5% over a month to $25.538 trillion in March of 2025, following a downwardly revised 0.7% increase in February.
The United States’ personal spending data for April is also due on Friday, 30 May 2025. Personal consumption expenditures (PCE) in the United States rose by 0.7% month-over-month in March 2025, following an upwardly revised 0.5% gain in February.