Mumbai: The Indian stock market is likely to take direction from global events this week, especially the rising tensions in West Asia.
Investors will closely watch the latest military exchanges involving the United States and Iran. Any further increase in tensions could affect global financial markets and push crude oil prices higher.
At the same time, any signs of peace talks or easing tensions could improve investor confidence.
Crude oil prices to influence markets
Crude oil prices will remain one of the biggest factors for the market this week.
A rise in oil prices increases India’s import bill and may create inflation concerns. On the other hand, stable or lower oil prices are generally seen as positive for the economy and stock markets.
Analysts believe movements in global oil prices will be watched closely by investors throughout the week.
Economic data to provide fresh signals
Several important economic indicators will be released during the week.
Investors will keep an eye on India’s Industrial Production (IIP) data, along with the final HSBC Manufacturing, Services and Composite PMI figures.
The country’s foreign exchange reserves data will also be closely tracked to understand the overall health of the economy.
In addition, the US manufacturing index will be monitored as it may influence global market sentiment.
Auto sales and monsoon progress important
The monthly automobile sales numbers, scheduled for July 1, will be another key event for investors.
Strong vehicle sales may indicate healthy consumer demand, while weaker numbers could raise concerns about economic activity.
The progress of the southwest monsoon will also remain important, as a good monsoon supports farm output, rural income and overall economic growth.
Foreign investors to remain key
The buying and selling activity of Foreign Institutional Investors (FIIs) will continue to influence the market.
If foreign investors continue to invest in Indian equities, market sentiment could remain positive. However, heavy selling may increase volatility.
Markets ended last week with modest gains
Indian benchmark indices closed the previous week in positive territory despite global uncertainties.
The BSE Sensex gained 297.57 points, or 0.38 per cent, while the NSE Nifty rose 42.9 points, or 0.17 percent.
Market experts believe investors will remain cautious this week as they balance domestic economic data with global geopolitical developments before making fresh investment decisions.