The Indian stock market is poised for a week filled with significant events that could dictate its trajectory. Investors are keenly awaiting the Q4 results of various companies, the expiry of Futures and Options (F&O) contracts, and the release of crucial GDP data. Furthermore, global cues will continue to play a vital role in shaping market sentiment.

Q4 Results Season Nears Conclusion

The ongoing Q4 earnings season is nearing its end, with a slew of companies scheduled to release their financial results. On May 24, 2025, companies like NTPC and JK Cement announced their results. Earlier in the week, ITC and Sun Pharma announced their earnings on May 22, 2025. JSW Steel is expected to report a sequential improvement in earnings for Q4FY25, driven by better realisations and a moderation in input costs, particularly coal.

Investors will be closely monitoring these results for insights into corporate performance and future outlook. Management commentary on debt, capex plans, and demand trends will be crucial in assessing the health of India Inc. Sectors like banking, financials, energy, and metals are expected to remain in focus.

F&O Expiry

The expiry of F&O contracts is another key event to watch out for. The National Stock Exchange (NSE) has revised the weekly expiry of F&O contracts from Thursday to Monday, effective April 4, 2025. This change means that expiry-related price movements will now occur on Mondays instead of Thursdays. The shift in expiry day may lead to higher implied volatility and premiums for options traders, as they will have to account for global events over the weekend, which could lead to unexpected gap-ups or gap-downs, increasing risks.

The F&O expiry can create stock price fluctuations, and it can also affect equity investments. Therefore, it is important to analyze the expiry dates for every F&O contract and examine the underlying assets.

GDP Data Release

The release of the provisional GDP data for the fourth quarter and fiscal year 2025 on May 30 will be a significant event. India's Q4 GDP growth is expected to rise. Economists project India's GDP growth in a wide range. Deutsche Bank forecasts India's real GDP to grow, driven by decreased subsidies and improved net tax collections. Favorable inflation and supportive government policies further bolster this growth, potentially pushing real GDP above 7%.

The GDP data will provide insights into the health of the Indian economy and influence market sentiment. A higher-than-expected reading should be taken as positive/bullish for the INR, while a lower-than-expected reading should be taken as negative/bearish for the INR.

Global Cues

Global cues will continue to exert influence on the Indian stock market. Factors such as the dollar index, US Treasury bonds, and crude oil prices can significantly impact market sentiment and capital flows. Generally, there tends to be an inverse relationship between the dollar index and the Indian stock market. When the dollar index falls, Foreign Institutional Investors (FIIs) tend to invest more in Indian stocks. Conversely, when the dollar index strengthens, the Indian stock markets may witness pain due to FII outflows.

Concerns over rising US debt and bond yields have triggered global sell-offs in the past. Investors should also monitor the Nasdaq index, which has a significant impact on the Indian IT sector.

Navigating the Week Ahead

Given the confluence of these factors, the Indian stock market is expected to exhibit volatility in the week ahead. Experts advise investors to adopt a stock-specific approach and avoid aggressive positioning until greater clarity emerges. Maintaining a positive bias is recommended unless the Nifty decisively breaks below the 24,500 mark, with a continued focus on stock selection. Preference should be given to sectors such as banking, financials, energy, metals, and realty, while remaining selective in others. Traders are advised to maintain strict stop-loss levels and stay prepared for heightened volatility. Keeping abreast of global developments and key domestic policy announcements will be essential in navigating the markets in the weeks ahead.