Investors will closely track the movement of the rupee against the US dollar and the trading pattern of foreign institutional investors, with sentiment likely to remain fragile amid continued geopolitical uncertainty, analysts quoted by news agency PTI said.Domestic stock markets will be closed on Tuesday for Shri Mahavir Jayanti and again on Friday for Good Friday, leaving traders with a short week.
Oil and ceasefire talks Rupee stability In focus
Ajit Mishra, senior vice president, research, Religare Broking Ltd, told PTI that global macro developments are likely to dominate the market trend in the coming sessions.
“This week is expected to remain influenced by global macro developments, particularly crude oil price trends and progress in the US-Iran ceasefire negotiations, which will be crucial in shaping market sentiment. Rupee stability will also be important for any recovery in foreign institutional flows,” Mishra said.Domestically, Mishra said investors will be monitoring key economic indicators including February industrial production data and the HSBC Manufacturing PMI for March, which may provide a clearer picture of the economic momentum and financial situation.
The pressure on stocks has already been evident. Foreign investors have withdrawn Rs 1.14 lakh crore (about $12.3 billion) from local stocks this month amid growing conflict in the Middle East and a weak rupee.The conflict in the Middle East began on February 28. Since then, the United States and Israel have struck Iran, while Tehran has responded by targeting Washington’s regional allies and Tel Aviv.
Markets remained volatile after last week’s losses
Markets are likely to remain highly sensitive to any shift in the geopolitical situation, Enrich Money CEO Ponmudi R told PTI.He added: “Looking ahead, markets are likely to remain volatile and driven by developments on the geopolitical front. Investors will be closely monitoring the situation in the Middle East, as any escalation or signs of easing could quickly change sentiment, especially through its impact on crude oil prices.”“High oil prices are expected to continue to weigh on markets, while any pullback could lead to short covering and support the recovery.”Foreign fund inflows, rupee movement and broader global market trends will also shape the near-term outlook, he added.Next week will be largely driven by global factors, said Hariprasad K, research analyst and founder of Livelong Wealth.“Global dynamics are expected to largely dictate next week, with crude oil, currency movements and geopolitical developments remaining the key variables,” he said.In the holiday-abbreviated week, the BSE Sensex fell 949.74 points, or 1.27 per cent, while the NSE Nifty fell 294.9 points, or 1.27 per cent, reflecting pressure from global volatility.
Top companies lose Rs 1.75 lakh crore in market capitalization
The broader market mood remained subdued last week, with the combined market capitalization of seven of the 10 most valuable companies shrinking by Rs 1.75 lakh crore, led by sharp erosion in Reliance Industries, which took the biggest hit.Reliance Industries alone lost Rs 89,720.3 crore in market cap, while HDFC Bank lost Rs 37,248.59 crore and State Bank of India lost Rs 35,399.42 crore. ICICI Bank, Bharti Airtel, Hindustan Unilever and TCS also saw declines.However, Larsen & Toubro, Bajaj Finance and Infosys bucked the trend and recorded gains in market valuation.Last week saw sharp volatility, with early losses driven by concerns about power supply disruptions, the rupee falling to a record low and increasing volatility, Religary’s Mishra said. A mid-week rebound followed on hopes of a temporary easing of US-Iran tensions, before renewed selling pressure on Friday wiped out those gains.
