Market outlook for next week (26-Jan to 30-Jan)

26 Jan 2026 , 03:12 PM

BIG NEWS – WHAT TO WATCH OUT FOR NEXT WEEK?

The coming week will be a truncated week due to trading holiday on 26-January on account of Republic Day celebrations in India. However, the last week of January is likely to see the biggest event risk of the last few weeks carried forward. Greenland, the frozen island in Europe, will continue to remain the centre of global attention. Trump wants full control over Greenland for trade and strategic reasons. Obviously, the EU is far from pleased and it has also deferred the proposed US-EU trade deal as a response.

However, the coming week could see some toning down of rhetoric, as Trump would not want to lose the support of his long-time ally, the EU. Trump’s agenda has been to curtail the Russian and Chinese influence around the Arctic region, and that is something the EU would also tacitly agree with the US on. Hence, the US may not have to take Greenland by force, but Denmark and the EU would, most likely, be open to a larger role played by the US in that region. That would serve the American and European interests quite well.

The bigger area of interest for India would be on the trade deal front. India has recently signed a CEPA with the UAE to expand trade to $200 Billion by 2032. Also, the Indo-EU trade deal is very close to fruition and could be announced, either this month-end or early next month. However, the missing link continues to be a trade deal with the US, which is what the markets are interested. After all, once the Indo-US trade deal is signed; exports will get back into peak performance, and even FPI flows into India should normalize.

DATA TRIGGERS TO WATCH OUT NEXT WEEK

Here are key data points that will influence stock markets next week.

• Index of Industrial Production (IIP) data for December will be announced this week. After IIP rebounded to 3.3% in November, there are expectations that December IIP could be still higher in tandem with core sector bounce and higher manufacturing IIP.
• Towards the end of the week, the Controller General of Accounts (CGA) will also announce the fiscal deficit update for the first 9 months of FY26. That will be a critical input to evaluate whether India is on target for 4.4% fiscal deficit to GDP ratio.
• The all-important US Fed January meeting will also be held next week, followed by the statement by the Fed governor. However, with GDP growth at 4.4% in Q3 and PCE inflation at 2.9%; the chances of a rate cut are fairly low at this juncture.
• Markets will be keenly watching the GODS (gold, oil, dollar, silver) data. While gold and silver are at lifetime highs on safe-haven buying, dollar is weak and oil has rebounded on expectations of limited Russian supply. GODS trend is unlikely to change.
• Key global data points. Durable Goods Orders, Atlanta Fed GDP, Powell Speech, Trump Speech, Jobless Claims, Trade Deficit, PPI, Fed Balance Sheet (US). Unemployment, GDP (EU); Core CPI, IIP, Bank of Japan Minutes (Japan); CFTC Net Positions (UK); and Composite PMI (China).

Let us shift focus to what small and medium investors should focus on next week.

WHAT SHOULD INVESTORS BE FOCUSING ON NEXT WEEK?

While the broad macro data points are fine, individual investors must also focus on some the key points of immediate importance from an investment perspective.

• Investors should keep a watch on whether Nifty dips below 25,000 with volumes and whether Sensex dips below 80,000 with volumes. These could be critical in deciding the underlying market sentiments.
• Investors should keep an eye on some of the key large cap results for Q3FY26; including Kotak Mahindra Bank, Ultratech Cements, Axis Bank, Asian Paints, Larsen & Toubro, Bharat Electronics, Maruti, SBI Life, TVS Motors, ITC, Tata Motors, Bajaj Auto, and NTPC.
• Investors must also keep an eye on key mid-cap results for Q3FY26; including Chennai Petro, Marico, CG Power & Industrial, SBI Cards, GE Vernova, Dabur, Swiggy, NTPC Green Energy, Paytm, Prestige Estates, Bank of Baroda, Meesho, and SAIL.
• There are also some important dividend record dates falling next week for stocks like Wipro, SRF, Persistent Systems, IIFL Finance, Godrej Consumer Products, Siemens Energy, CAMS, Mastek, Jindal Stainless, and KEI Industries.
• Rupee value is a key factor in deciding market direction. Last week, the rupee got close to ₹91.98/$ before showing some strength. With limited intervention from the RBI, any stock market recovery will depend on the rupee starting to show signs of strength.
• On the IPO front, there is not much action in the coming week. January has only seen 3 IPOs with the third IPO of Shadowfax Technologies slated to list on the stock exchange next week. The other two; Bharat Coking Coal and Amagi, are trading at a premium.

What does this mean for Nifty and Sensex levels in the coming week to January 30, 2026.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX bounced from 11.37 levels to 14.19; as a spike in geopolitical risk led to rise in caution in the markets. That is why, the VIX is also popularly referred to as the Fear Index.

• Nifty closed at 25,049 Spot. Nifty has immediate support at 24,933 and major support at 24,611. Immediate resistance is at 25,256 and later at 25,579. Nifty remains a Short Trade with a weak undertone, unless it breaks above 25,361 with volumes. Long positions can only be initiated on Nifty if it closes above 25,361, with robust volumes.
• Sensex closed at 81,538 Spot. Sensex has immediate support at 81,168 and major support at 80,123. Immediate resistance is at 82,212 and later at 83,256. Sensex remains a Short Trade with a weak undertone, unless it breaks above 82,589 with volumes. Long positions can only be initiated on Sensex if it closes above 82,589, with strong volumes.

Indian markets enter a truncated week of trading with markets shut on Monday on account of Republic Day. When trading resumes on Tuesday, the big market trigger would still be the global geopolitical risk factors. Other triggers will remain secondary for now!

 

Summary The coming week has several key data flows coming in, but is likely to be dominated by the global geopolitical risks. For India, the focus would be on how soon it can stitch up an Indo-US trade deal, and how the RBI is able to defend the value of rupee. At this juncture, the global investors need a very strong reason to come to India. Buffett Ratio is inordinately high at 125% and weak rupee is eroding most of the dollar gains. Any story to be workable, must make sense to global investors in dollar terms.