Kamal Ghorui
Domestic equities are expected to remain volatile this week as investors track the Reserve Bank’s monetary policy decision, global macroeconomic cues and evolving developments in the West Asia conflict, analysts said, according to PTI.Market participants will also keep a close watch on crude oil price movements and foreign fund flows, which continue to influence sentiment.Vinod Nair, Head of Research at Geojit Investments Ltd, said the RBI’s Monetary Policy Committee (MPC) meeting will be the key domestic trigger, with investors focusing on the central bank’s stance on inflation and growth.“A rate pause is near-certain consensus, the central bank walks a tightrope between crude-driven inflation risks and a four-year low Manufacturing PMI signalling a softening growth impulse. The governor’s commentary on the rate cycle trajectory and FY27 projections will be closely monitored.“Globally, the US March CPI reading will carry significant importance, as it buries residual Fed rate-cut hopes, strengthens the dollar and tightens financial conditions for emerging markets, including India,” Nair said.He added that geopolitical developments in West Asia will remain the dominant factor shaping market direction.“Indian markets return after a three-day gap and remain acutely vulnerable to weekend war developments, with crude trajectory and any credible ceasefire signal being the decisive variable that could either trigger a sharp relief rally or extend the current sell-on-rise mode,” he said.In the previous holiday-shortened week, the BSE Sensex declined 263.67 points, or 0.35%, while the NSE Nifty fell 106.5 points, or 0.46%.Siddhartha Khemka, Head of Research (Wealth Management) at Motilal Oswal Financial Services Ltd, said investor sentiment will remain closely linked to developments in the West Asia conflict.Brent crude prices have stayed elevated near $107 per barrel, fuelling concerns around imported inflation. Currency pressures have also intensified, with the rupee weakening sharply before recovering towards Rs 93 against the US dollar following RBI intervention, he noted.Foreign institutional investor (FII) outflows remain a key overhang, with March witnessing heavy selling of Rs 1.2 lakh crore, among the highest monthly outflows in recent years.“Investors will monitor the US Federal Open Market Committee (FOMC) meeting minutes, GDP data, and initial jobless claims for further cues on growth and the policy trajectory.“Overall, markets are expected to remain volatile as geopolitical developments, crude price movements, FII flows and global macro data continue to drive sentiment,” Khemka said.Analysts said any signs of de-escalation in the West Asia conflict could ease crude prices and stabilise the currency, offering relief to markets, while further escalation may prolong risk aversion and keep pressure on foreign flows.
