US inflation data and earnings reports set to drive market volatility
- US October CPI and PPI data will be released this week, influencing Federal Reserve rate hike expectations.
- Cisco and Applied Materials lead a slate of major US corporate earnings reports scheduled through November 13.
- Indian equity markets maintain a rally following favorable US midterm election results.
- Geopolitical tensions between the US and Iran continue to drive volatility in bullion and crude oil markets.
Investors are preparing for US inflation data releases this week, with the Consumer Price Index due on 10 November and the Producer Price Index following on 13 November. These figures are critical for Federal Reserve interest rate decisions, as current policy rates sit at 3.75-4.00%.
Hariselvan said stronger US job growth and firmer wage trends raise the importance of upcoming US inflation data. If the October CPI, which has a month-on-month forecast of +0.3%, exceeds expectations, it would signal continued inflationary pressure.
Such data could boost the dollar by raising expectations of additional Federal Reserve rate hikes. If inflation figures confirm stickiness, expectations for further hikes are likely to increase, potentially driving dollar buying through wider US-Japan interest rate differentials.
Market participants are also monitoring Bank of Japan December rate-hike bets alongside these US indicators.
Major US companies report quarterly earnings
Investors are focusing on a slate of nine major earnings reports this week from US companies with market capitalisations exceeding $40 billion. Cisco and Applied Materials are the primary focus of these scheduled reports between 9 and 13 November.
Monday, 9 November, features five major earnings reports. Ferguson and KKR are scheduled to report before the market opens, while Constellation Energy will hold an earnings call that morning. Occidental and Take-Two are set to report after the market closes on the same day.
TransDigm will report earnings before the market opens on Tuesday, 10 November. Vylor is scheduled to report after the market closes on Wednesday, 11 November.
Thursday, 12 November, features two major earnings reports. Cisco will report after the market closes, and Applied Materials will hold an earnings call that evening. There are no confirmed earnings reports scheduled for Friday, 13 November.
Additional US companies, including NEBIUS, Ondas, Nu Holdings, and Brookfield, will release earnings before the US market opens. Other companies reporting before the US market opens include Applied Materials, Cerebras Systems, Cisco, Virgin Galactic, Barrick Mining, Constellation Energy, KKR & Co, and monday.com.
Rocket Lab, AST SpaceMobile, Trump Media & Technology, Hims & Hers Health, Occidental Petroleum, and Quantum Computing will also report earnings before the US market opens. Hong Kong-listed SMIC, Yue Yuen Industrial (Holdings), and Samsonite will announce earnings after the Hong Kong market closes.
Indian markets sustain rally following US midterm election results
Indian equities surged nearly 9% last week, with the Nifty 50 index reclaiming the 25,000 level. The Nifty advanced 1,977.25 points, or 8.58%, to close at 25,030.35 on Friday 6 November. The Sensex rose 8.82%, closing at 81,028 on the same day.
Indian markets rallied significantly following US midterm election results that were favourable for investors. Foreign institutional investors bought Rs 45,960 crore of Indian equities during the week, while domestic institutional investors sold Rs 24,197 crore. This shift suggests market leadership has moved towards foreign capital.
Global investors reassessed exposure to technology-driven markets following a sell-off in AI-related stocks. This decline followed concerns regarding data centre spending and potential regulatory oversight after Democratic gains in the US Congress. On 5 November, the Nasdaq-100 fell 6.4%, and the Philadelphia Semiconductor Index dropped approximately 12%.
India’s strong earnings growth and attractive large-cap valuations have boosted its investment appeal. Softer inflation data and stable global equity markets could further improve risk appetite and lead to more allocations toward emerging markets. Large-cap stocks continued to dominate the rally, though market breadth remained relatively weak.
The Nifty traded in a wide range of 1,823.30 points last week. The India VIX jumped 14.18% to reach 17.47. Technical indicators show the index nearing a resistance range of 25,000 to 25,200. A sustained break above this zone is required to push the rally towards earlier peaks.
Immediate resistance levels are expected at 25,050 and 25,300, while support levels are projected at 24,730 and 24,500. The technical setup improved after a bounce from the long-term support area between 22,700 and 22,800. The weekly RSI stands at 60.96, while the weekly MACD produced a positive crossover above its signal line.
Candlestick patterns show a large bullish candle reflecting strong buying throughout the week. Relative Rotation Graphs show the Nifty PSU Bank, BankNifty, Services, Media, Pharma, and IT indices in the leading quadrant. The FMCG, Financial Services, PSE, and Infrastructure indices have moved into the improving quadrant.
The Nifty Realty Index shows improvement in relative momentum despite its position in the weakening quadrant. Conversely, the MidCap 100, Auto, and Metal indices remain in the lagging quadrant. The Energy Index is also in the lagging quadrant but is improving its relative momentum.
Market participants are advised to adopt a selective approach and protect profitable positions with trailing stop-losses. Position sizing and risk management remain important due to elevated volatility and a shortened trading week. The week ahead starts with a one-hour Muhurat trading session on Sunday 8 November, with a trading holiday on Tuesday 10 November.
Dollar-yen exchange rate faces potential intervention
Other forecasts place the range between 155.00 and 160.00 for the same period. During the previous week of 2-6 November, the pair reached a low of 157.63 and a high of 158.77.
Geopolitical tensions and oil prices impact bullion markets
Precious metals are responding to US-Iran tensions, Russia-Ukraine peace negotiations, and inflation releases from China, the United States, Germany, Japan, and India.
Brent crude closed near $98 a barrel, while WTI crude fell toward $90 after earlier trading above $104-105. Both benchmarks posted weekly drops exceeding 12%, which has eased pressure from high energy prices. Ponmudi R, CEO of Enrich Money, said the sharp fall in global oil benchmarks is a key factor supporting the market recovery. The decline in oil prices may boost consumption by lowering transport and input costs, lessening worries about India’s import bill, inflation, and corporate profits.
The durability of this oil price decline is tied to geopolitical factors, particularly progress in de-escalation between the US and Iran, though renewed military action remains a risk. Hariselvan said market sentiment will heavily depend on continued progress toward de-escalation in the US-Iran situation. US President Donald Trump confirmed further military strikes against Iran while stating that Washington has made significant headway in talks with Tehran.
This rally coincided with US midterm election results where Democrats secured major victories in both chambers of Congress. China and US consumer-price indexes will be released one after another next week.
Anthropic IPO and corporate restructuring developments
JTBC is preparing to announce a sale after the Seoul Rehabilitation Court allowed EY Hanyoung to act as sales manager, with a corporate value estimated at around 400 billion won. The deadline for submitting the rehabilitation plan for JTBC is 29 January.
US economic indicators and debt levels
The US October employment report released on 6 November showed nonfarm payrolls rose by 165,000, exceeding the 65,000 forecast, while the unemployment rate fell to 4.1%. US outstanding debt has surpassed $40 trillion, which is approximately ¥6,337 trillion. The US 10-year Treasury yield was near 4.84%, remaining elevated despite easing from its recent peak, reflecting concerns over persistent inflation and US economic strength.
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