PTI news agency quoted analysts as saying that the conflict in the Middle East and fluctuations in Brent crude prices will remain the biggest drivers of market sentiment in the near term.“Markets this week are expected to remain highly volatile and largely driven by geopolitical headlines, with investor attention firmly focused on developments surrounding the ongoing situation between the US and Iran,” Enrich Money CEO Ponmudi R told PTI.He said Brent crude would remain a “critical macro variable” for the market’s direction.“A sustained decline in crude oil prices below the US$90 level, or tangible progress towards de-escalation, could support relief rallies across riskier assets. Conversely, prolonged geopolitical uncertainty or renewed tensions may continue to weigh on sentiment and keep volatility high,” Ponmudi said.
Inflation data, global signals in focus
Investors will also be monitoring inflation data from both India and the US during the week for signals on interest rate paths.
According to Siddhartha Khemka, head of research and wealth management at Motilal Oswal Financial Services, India’s CPI inflation data for April and US inflation indicators, including CPI and PPI numbers, will be major catalysts for the markets.“Indian stocks are expected to remain highly sensitive to geopolitical developments in the near term, with markets likely to trade within a broader range,” Khemka said.He added that US inflation readings could influence expectations about interest rate cuts by the Fed, bond yields and overall global risk sentiment.
Earnings season is entering the final stage
Market participants will also be tracking quarterly earnings announcements from major companies including Canara Bank, Tata Power, Bharti Airtel, DLF, Hindustan Petroleum Ltd and JSW Steel this week.Foreign institutional investor (FII) inflows, crude oil prices and rupee movement will continue to determine the trend of large-cap stocks, Santosh Meena of Swastika Investmart told PTI.Foreign investors have already withdrawn Rs 14,231 crore from Indian stocks so far this month amid global macroeconomic uncertainty, according to PTI.Last week, the BSE Sensex rose 414.69 points or 0.53 per cent, while the NSE Nifty rose 178.6 points or 0.74 per cent.