Kamal Ghorui
The Middle East conflict has entered its fourth week and the developments have sent shockwaves through global stock markets. For the upcoming week, investor sentiment is expected to remain sensitive to global developments, particularly the ongoing crisis and its impact on crude oil prices, in the holiday-shortened trading week ahead. Alongside geopolitical cues, movements in global equity markets, foreign investor activity, and fluctuations in the rupee against the US dollar are expected to guide market direction. Domestic exchanges will observe a holiday on Thursday on account of Shri Ram Navami. According to Ajit Mishra, the week is likely to remain heavily influenced by incoming data and global uncertainties. “This week is expected to remain data-sensitive amid ongoing global uncertainties. Developments in the West Asia conflict and movements in crude oil prices will continue to act as key external drivers and are likely to dictate the near-term market trend.” “On the domestic front, investors will closely monitor HSBC Flash PMI data for manufacturing, services, and composite segments, which will provide an early indication of business activity trends,” he added. Foreign portfolio investors have continued to pare their exposure, withdrawing Rs 88,180 crore (around $9.6 billion) from Indian equities so far this month. The outflows come amid rising tensions in West Asia, a weakening rupee, and concerns over the implications of higher crude oil prices on economic growth and corporate profitability. Market participants expect volatility to persist, with global triggers playing a decisive role in shaping near-term movement. “Looking ahead, markets are likely to remain highly volatile and event-driven, with near-term direction largely contingent on developments in the Middle East, particularly the evolving situation around the Strait of Hormuz. Any prolonged disruption could keep crude prices elevated above the USD 100-mark, intensifying inflationary and current account pressures while sustaining a risk-off sentiment,” said Ponmudi R. He further noted that foreign institutional investor flows, currency movements, and broader global cues, including the strength of the US dollar, will remain key indicators for traders. He added that easing geopolitical tensions or a decline in crude oil prices could lead to short-covering or relief-led moves, whereas renewed escalation may continue to exert downward pressure. In the preceding week, benchmark indices ended with marginal losses. The BSE Sensex declined by 30.96 points, or 0.04%, while the NSE Nifty fell by 36.6 points, or 0.15%.
