West Asia: Ongoing tension in West Asia, crude oil prices and US inflation data will decide the direction of the local stock market this week. Apart from this, activities of foreign investors and global market trends will also affect the direction of the market.
Market may remain sensitive regarding global monetary policy, crude oil prices
Ajit Mishra, Senior Vice President (Research), Religare Broking Limited, said, “This week the market may remain sensitive regarding global monetary policy, crude oil prices and geopolitical developments. “Investors will keep an eye on changing expectations regarding the Federal Reserve’s monetary policy meeting in September after America’s better-than-expected employment data.”
Special attention will be kept on inflow of foreign institutional investors and movement of rupee.
On the domestic front, inflows of foreign institutional investors, movement of rupee, crude oil prices and liquidity position in the domestic market will be monitored. Ajit Mishra said that developments related to the Strait of Hormuz will also be important, because they can have a direct impact on India’s inflation, external balance and profitability of companies.
Increasing tension between America and Iran increases geopolitical risk in the energy market
Ponmudi R, CEO of Enrich Money. Said that last week the price of Brent crude had increased by more than 8 percent and that of WTI crude by more than 9 percent. Rising US-Iran tensions and concerns over the Strait of Hormuz have increased geopolitical risks in the global energy market. Now the market will keep an eye on the upcoming inflation data of America.
Data may prove important for the policy direction of the Federal Reserve
According to Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, these data could prove to be important for the Federal Reserve’s policy direction and global market sentiment. Expectations regarding US bond yields and interest rates will also be influenced by inflation data.
There was a decline in the market last week
Meanwhile, higher crude oil prices due to ongoing tensions in West Asia may continue to weigh on market sentiment. Let us tell you that last week BSE Sensex lost 749.08 points or 0.96 percent. Whereas NSE Nifty had closed down by 277.95 points or 1.14 percent.