The Indian stock market is gearing up for another eventful week as analysts highlight key factors that could influence investor sentiment. At the forefront are the ongoing Israel-Iran tensions and fluctuating crude oil prices, both of which have the potential to disrupt global supply chains and market stability.
Last week, domestic markets ended on a strong note despite mid-week volatility triggered by geopolitical uncertainties. The BSE Sensex surged 1,046.30 points, while the NSE Nifty climbed 319.15 points on Friday alone. This resilience, however, doesn’t rule out the possibility of more turbulence ahead.
Global cues are expected to dominate market movements in the coming days. Ajit Mishra, SVP of Research at Religare Broking Ltd, pointed out that investors will be closely watching the Israel-Iran conflict, US economic data, and Federal Reserve commentary. These external factors could sway market direction, especially if geopolitical tensions escalate further.
Crude oil prices remain a critical variable. Any disruption in supply due to Middle East conflicts could lead to price spikes, directly impacting India’s import bill and inflation metrics. Domestically, investors will also keep tabs on monsoon progress, monthly expiry-related volatility, and foreign institutional investor (FII) activity.
Vinod Nair, Head of Research at Geojit Investments Ltd, emphasised that geopolitical uncertainty continues to cast a shadow. The upcoming US GDP and Personal Consumption Expenditure (PCE) data, along with India’s PMI figures, will provide further clues about economic recovery trends. These indicators could shape investor confidence in the short term.
Last week, both the BSE benchmark and Nifty posted significant gains, rising 1.58% and 1.59% respectively. However, Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, cautioned that the market might consolidate with bouts of volatility. Key triggers include US manufacturing and services PMI data, as well as any new developments in the Middle East.
Foreign portfolio investment trends also warrant attention. Vipul Bhowar, Senior Director at Waterfield Advisors, noted that FPI inflows hit an eight-month high in May, reflecting renewed foreign investor interest. However, the Israel-Iran conflict and global uncertainties have reintroduced a note of caution in June.
Investors should brace for a week where global headlines and economic data releases could dictate market sentiment. The interplay between geopolitical risks, crude oil dynamics, and macroeconomic indicators will likely keep traders on their toes. Stay tuned for updates as the week unfolds.