Dalal Street Forecast: What will guide market sentiment this week?

Dalal Street is set to witness a busy week as investors will follow local and global developments. RBI’s interest rate decision, key economic data releases, crude oil prices, and evolving situation between the US and Iran are expected to be the main factors driving market sentiment.Market participants will also closely monitor macroeconomic indicators, foreign investor activity and rupee movements against the US dollar for signals about the near-term outlook for stocks.“Participants will closely monitor global developments surrounding the US-Iran situation and the movement of crude oil prices, which remain critical to the inflation outlook, currency stability and foreign flows,” said Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd.The week will start with the release of the final HSBC Manufacturing PMI reading for May on Monday. This will be followed by services PMI and composite PMI data on Wednesday, providing insights into demand trends, business activity and growth resilience across sectors.“The main event of this week will be the Reserve Bank of India’s monetary policy announcement on Friday,” Mishra added.Apart from the central bank’s policy decision, investors are expected to keep an eye on India’s GDP growth numbers and foreign exchange reserves data to better understand the economic momentum and external sector stability.

Next week comes after a negative close for the standard indices. Last week, the BSE Sensex fell by 639.61 points, or 0.84 per cent, while the NSE Nifty fell by 171.55 points, or 0.72 per cent.Investor interest will remain firmly fixed on geopolitical and economic developments, said Ponmudi R, CEO of online trading and wealth technology company Enrich Money.“Markets are expected to remain highly sensitive to geopolitical and macroeconomic developments this week, with investor attention firmly focused on the evolving US-Iran negotiations, broader diplomatic developments in the Middle East and the trajectory of crude oil prices,” he said.He added that market participants will closely monitor rupee movements, institutional investment flows, global stock market trends and key macroeconomic indicators for further direction.The RBI policy meeting will be the most important domestic event of the week, said Santosh Meena, Head of Research, Swastika Investmart Ltd.“The key domestic event will be the Reserve Bank of India’s monetary policy meeting, scheduled to be announced on Friday.

He said market participants will closely monitor the RBI’s stance on inflation, liquidity and interest rates amid rising inflationary concerns and currency-related developments.Mina also noted that monthly auto sales data for May, which is scheduled to be released on June 1, will provide an indication of demand trends within the sector.The immediate direction of Indian stocks will largely depend on the outcome of the Reserve Bank of India’s policy decision and GDP data release, said Vinod Nair, Head of Research, Geojit Investments Limited.Looking ahead, the near-term directional call for stocks depends on two intertwined catalysts: RBI’s monetary policy decision and India’s GDP data release, while India’s PMI and IIP data will provide the first meaningful read on industrial momentum in early Q1FY27, Nair said.(Disclaimer: Recommendations, opinions regarding stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times Of India)