Kamal Ghorui
Stock market began the week in red as tensions in the Middle East continue to intensify and benchmark indices tumble over 0.2%. While NSE Nifty50 opened below 22,800, BSE Sensex tumbled over 300 points. Around 9:25 am Nifty50 traded at 22,666.90, down 46 points or 0.2%. The 30 share pack Sensex also slipped 197 points or 0.2% to 73,121.Rupee, however remained firm, opening 0.1% up at 93 against US dollar, after registering multiple record lows the previous week. This comes as oil prices remain firm above the $110 per barrel mark as US President Donald Trump as once again issued an ultimatum for Iran to open the Strait of Hormuz. Earlier on Saturday, Trump warned that Tehran has 48 hours to strike a deal or reopen the strategic Strait of Hormuz “before all hell will rain down on them”. According to analysts, Dalal Street is likely to remain volatile this week as investors track key domestic and global developments along with ongoing tensions in the Middle East, as the conflict has entered its sixth week. Focus will be on the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting, Middle East developments, FPI selling, rupee and geopolitical news. Vinod Nair, head of research at Geojit Investments Ltd, told PTI that investors will closely observe how the central bank balances inflation concerns with signs of slowing 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 stated. He added that markets may react sharply as trading resumes after a three-day break, especially depending on developments. “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,” Nair added. Last week, which was shortened due to holidays, saw benchmark indices end lower. The BSE Sensex fell 263.67 points, or 0.35%, while the NSE Nifty declined 106.5 points, or 0.46%. Siddhartha Khemka, Head of Research, wealth management at Motilal Oswal Financial Services Ltd, echoed similar views saying that market sentiments are closely tied to the ongoing US-Iran war. “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 further added that any relaxation in Middle East tensions could help markets by bringing down crude prices and stabilising the currency. However, further escalation may keep pressure on investor sentiment and foreign inflows. Foreign institutional investors (FIIs) have continued to sell, with outflows of Rs 1.2 lakh crore recorded in March, one of the highest in recent years. In global markets, Asian stocks traded majorly in green. While Japan’s Nikkei and South Korean Kospi jumped in green, Australia, Hong Kong and Shanghai remained shut.
