As the new trading week begins, investors are set to focus on a mix of local economic indicators and global developments, with geopolitical tensions in the Middle East.Geopolitical developments, crude oil prices and a busy domestic economic calendar are expected to guide stock market sentiment this week, as investors closely track the fallout from recent military exchanges involving the US and Iran.Analysts said the market direction will largely depend on how geopolitical tensions develop, especially their impact on global crude oil prices. Besides, key domestic macroeconomic data, foreign investor activity and the progress of the southwest monsoon will remain on investors’ radar.Market participants will closely monitor a range of economic indicators for signals about the health of the economy, said Ajit Mishra, senior vice president of research at Religare Broking Ltd.“Market participants will closely monitor the Industrial Production (IIP) data, final readings of the HSBC Manufacturing and Services Index and Composite PMI, and foreign exchange reserves data to gain new insights into the health of the domestic economy,” Mishra told PTI.He added that at the global level, the trajectory of crude oil prices and geopolitical developments in the Middle East will remain the main drivers of market sentiment.
Aside from economic data, investors will closely monitor monthly auto sales numbers, due to be released on July 1, for signs of consumer demand and broader economic activity.Ponmudi R, CEO of Enrich Money, an online trading and wealth technology company, said markets are likely to remain sensitive to geopolitical developments in the coming days.“Next week is likely to be shaped by developments on the geopolitical front, as investors closely monitor tensions in the Middle East in the wake of recent military exchanges between US and Iranian forces.
While broader diplomatic efforts remain in place, the recent escalation has reminded markets that geopolitical risks remain high.“Any signs of resumption of negotiations or de-escalation could help sustain the recent improvement in risk appetite, while further deterioration in relations could lead to a reassessment of global growth and energy market outlook,” he told PTI.Domestically, he added, the progress of the southwest monsoon will remain a key area of focus for investors.Investors will also track key economic releases from both India and the US, said Siddhartha Khemka, head of research and wealth management at Motilal Oswal Financial Services Ltd.“Key data this week includes India’s manufacturing PMI and May industrial production data, along with the US manufacturing index,” Khemka said.Dalal Street ended last week with modest gains. The BSE Sensex rose 297.57 points, or 0.38%, while the NSE Nifty advanced 42.9 points, or 0.17%.