Stock markets likely to stay volatile this week amid US-Iran tensions, crude oil concerns

Indian equity markets are expected to remain volatile this week as investors closely track geopolitical developments surrounding the ongoing US-Iran tensions, movement in crude oil prices, foreign investor activity and key inflation data, according to market analysts.

Analysts quoted by news agency PTI said the conflict in the Middle East and fluctuations in Brent crude prices would remain the biggest drivers for 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 US-Iran situation,” Ponmudi R, CEO of Enrich Money, told PTI.

He said Brent crude oil would remain a “critical macro variable” for market direction.

“A sustained decline in crude prices below the USD 90 mark, or meaningful progress towards de-escalation, could support relief rallies across risk assets. Conversely, prolonged geopolitical uncertainty or renewed tensions may continue to weigh on sentiment and keep volatility elevated,” Ponmudi said.

Inflation data, global cues in focus

Investors will also monitor inflation data from both India and the United States during the week for cues on interest rate trajectories.

According to Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services, India’s April CPI inflation data and US inflation indicators, including CPI and PPI figures, would be key triggers for markets.

“Indian equities 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 the US inflation readings could influence expectations around Federal Reserve rate cuts, bond yields and overall global risk sentiment.

Earnings season enters final phase

Market participants will also track quarterly earnings announcements from major companies including Canara Bank, Tata Power, Bharti Airtel, DLF, Hindustan Petroleum Corporation Limited and JSW Steel this week.

Santosh Meena of Swastika Investmart told PTI that foreign institutional investor (FII) flows, crude oil prices and rupee movement would continue to dictate the direction of large-cap stocks.

Foreign investors have already pulled out Rs 14,231 crore from Indian equities so far this month amid global macroeconomic uncertainty, according to PTI.

Last week, the BSE Sensex gained 414.69 points, or 0.53 per cent, while the NSE Nifty rose 178.6 points, or 0.74 per cent.
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