The stock market heads into November after a week of recovery, with seven cues set to shape trading. The stock market ended the week with gains of nearly 2 percent, helped by renewed foreign investor buying, easing bond yields and encouraging corporate earnings. The Nifty 50 rose 2 percent during the week, while the Sensex gained 1.83 percent. The wider stock market did better still. The Nifty Midcap 100 rose 2.69 percent, and the Nifty Smallcap 100 advanced 4 percent.
On Friday, 30 October, the Nifty closed 116.35 points, or 0.51 percent, higher at 23,053.10. The Sensex gained 308.49 points, or 0.42 percent, to end at 74,459.53. Lower crude prices and easing bond yields supported the rally earlier in the week. Renewed tension in West Asia then pushed oil higher towards the end of the week, and investors booked profits in mid-cap and small-cap stocks.
Stock market cue 1: crude oil and OPEC
Brent crude ended near 117 dollars a barrel. Investors will watch the OPEC+ meeting on 1 November for signals on production and global supply. Higher crude prices are a direct concern for India, which imports most of its oil. A sustained rise can increase the import bill, widen the current account deficit and put pressure on the rupee. Any sign of higher supplies from OPEC+ could ease those concerns, while a decision to hold output tight would keep pressure on.
Crude also shapes the inflation outlook, and through it the Reserve Bank’s next move. Brent December futures surged to 117.8 dollars a barrel during the week, the highest since April, while West Texas Intermediate advanced towards 104 dollars. Both benchmarks were on course for gains of more than 12 percent for October.
Stock market cues 2 and 3: PMI data
India’s final manufacturing PMI for October will be released on Monday, 2 November, followed by services and composite PMI data on Wednesday, 4 November. The October flash readings showed manufacturing PMI easing to 54.9 from 55.1 in September. Services PMI rose to 56.2 from 55.2, while composite PMI increased to 56.7 from 55.9. All three readings stayed above 50, which indicates expansion. Stronger final readings could support stock market sentiment towards banking, consumption and industrial stocks by signalling resilient domestic business activity.
United States PMI data follows a similar timetable. The ISM Manufacturing PMI is scheduled for 2 November at 8:30 pm IST, and the ISM Services PMI for 4 November at the same time. These readings will offer clues about the health of the United States economy and the Federal Reserve’s interest rate outlook. Strong business activity with persistent price pressures could keep United States rates higher for longer, supporting the dollar and bond yields. Weaker readings could improve expectations of rate cuts.
Stock market cues 4 to 7: politics, jobs and flows
The United States midterm elections on 3 November will determine the composition of Congress and influence President Trump’s ability to push through his policy agenda. All 435 seats in the House of Representatives and 35 of the 100 Senate seats are being contested. Developments around Iran could have a more immediate effect on trading. The New York Times reported last week that the United States and Israel had drawn up plans for possible strikes against Iran after the elections. Any military escalation could push crude higher, increase volatility and trigger stock market selling in emerging markets, including India.
Jobs data fills the second half of the week. The United States ADP employment report for October is scheduled for 4 November at 6:45 pm IST, and the official non-farm payrolls report follows on 6 November at 7 pm IST. Investors will track payroll additions, the unemployment rate and wage growth. Strong hiring could reduce expectations of Federal Reserve rate cuts, supporting the dollar and bond yields. Weaker employment growth could have the opposite effect and support stock market equities.
Foreign flows and bond yields form the last cue. According to National Securities Depository Ltd data, foreign institutional investors were net sellers of Indian equities worth Rs 34,843 crore in October. Buying worth Rs 13,213.41 crore in the final week helped pare monthly outflows. Renewed foreign buying supported the latest stock market recovery, and a continuation could support large-cap stocks, above all in banking and financial services. Investors will also track domestic and United States Treasury yields. The benchmark United States 10-year Treasury yield fell below 5 percent last week.
Siddhartha Khemka, head of research at Motilal Oswal Financial Services, said Indian equities are expected to remain range-bound with bouts of volatility next week, citing geopolitical uncertainty and elevated crude as the main headwinds. For the Nifty, 22,800 is seen as support to watch, while a close above 23,200 would be needed to signal that the recovery has genuinely shifted gear.