Indian stock markets are poised to react to a confluence of factors this week, including domestic macroeconomic data, updates on US tariffs, and broader global trends. Investors are closely monitoring key economic indicators from India, such as industrial output and Purchasing Managers' Index (PMI) numbers, alongside international developments like potential US trade deals and tariff adjustments, which can significantly influence global business and investor sentiment.

Last week, both the Sensex and Nifty 50 demonstrated robust performance, with the Sensex rising over 2,100 points and the Nifty gaining nearly 666 points. This upward momentum, which continued for a fourth consecutive session on Friday, June 27, was supported by factors such as lower crude oil prices, easing geopolitical tensions in the Middle East, and positive global trends. The Sensex closed at 84,058.90, up 303 points (0.36%), while the Nifty 50 advanced 89 points (0.35%) to 25,637.80. Gains were broad-based, with midcap and smallcap indices also rising.

Looking ahead, several key data releases and events are expected to shape market direction. India's Industrial Production data for May is due on June 30, followed by the Manufacturing PMI for June on July 1, and the Services PMI for June on July 3. These figures will offer insights into the strength of India's economy and corporate order books. On the international front, July 3 will be a significant day for US economic indicators, with the release of Initial Jobless Claims, Nonfarm Payrolls, and the Unemployment Rate for June, along with the S&P Global Services PMI. These reports will provide a comprehensive view of the US labor market and service sector activity, influencing monetary policy expectations.

Concerns about possible US tariff hikes, particularly with tariffs set to resume on July 9, remain a focus. While market sentiment has improved due to perceived stability from a Middle East ceasefire, investors will continue to monitor the Israel-Iran situation as it can dictate market movements. Other crucial factors include foreign institutional investor (FII) activity, global crude oil prices, and the progress of the Indian monsoon, all of which impact market mood and future expectations. Additionally, the primary market will be active with seven new Initial Public Offerings (IPOs) scheduled to open in the coming week, including two mainboard and five SME IPOs.

Analysts maintain a positive outlook, suggesting a 'buy on dips' strategy. Vinod Nair of Geojit emphasizes a focus on early signs of company growth and global economic health, while Siddhartha Khemka of Motilal Oswal notes a positive market trend supported by strong institutional inflows and trade optimism. Ajit Mishra of Religare Broking highlights that data like IIP, PMI, and monsoon progress will determine short-term market direction. From a technical perspective, the Nifty's decisive breakout from its consolidation phase suggests a gradual move towards the all-time high of 26,277.35, though a temporary pause near the 25,800 gap area is possible. Strong support for Nifty is anticipated in the 24,800–25,200 zone. The banking index also shows a bullish trajectory, with potential to advance towards 58,200 and possibly the psychological mark of 60,000, supported by renewed buying interest in major private and PSU banks. Support for Bank Nifty has been recalibrated to the 56,000–55,500 region.