Analysts predict stock market volatility this week due to the Iran-Israel conflict, crude oil prices, US Fed rate decision, and inflation data. Global trends and domestic factors will influence market performance.
Tariff-related news would also dictate trends in the equity market, experts noted.
Stock markets faced heightened volatility last week and ended in the red amid escalating geopolitical tensions, which sparked a risk-off sentiment. Investor sentiment was hit hard on surging oil prices as fears of supply disruptions resurfaced.
“Indian stock markets are likely to follow the global trend, following rising tension in the Middle East amid the Israel-Iran conflict, which could fuel further pessimism and prompt investors to flee riskier assets. Also, traders will exercise caution ahead of the US Federal Reserve interest rate decision on Wednesday, coupled with other central banks of Japan and the UK announcing their interest rates separately,” Ketan Vikam, Head of Sales at financial services provider Almondz Institutional Equities, said.
Equity benchmark indices Sensex and Nifty tumbled nearly 1 per cent on Friday last week as weak global markets and a spike in Brent crude oil prices weighed on investor sentiment.
“Looking ahead, investors are expected to remain cautious amid premium valuations and geopolitical risks. All eyes are now on the upcoming US Fed meeting… The Fed’s commentary and economic projections will be closely scrutinised for future policy cues,” Vinod Nair, Head of Research, Geojit Investments Limited, said.
Last week, the BSE benchmark tanked 1,070.39 points or 1.30 per cent, and the Nifty declined 284.45 points or 1.13 per cent.
“Looking ahead, markets are likely to remain volatile amid ongoing geopolitical uncertainty and crucial central bank meetings. The US Federal Reserve’s upcoming policy decision will be closely tracked, as market participants look for clarity on the timing and magnitude of potential rate cuts, especially in light of mixed economic signals.
“Domestically, the focus will remain on the progress of monsoon, crude oil price trends, WPI inflation data, and FIIs (Foreign Institutional Investors) activity,” Ajit Mishra SVP, Research, Religare Broking Ltd, said.
Markets would also track trends in global equities and movement in the rupee, analysts said.
Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, “Overall, we expect the market to remain subdued on the back of weak global cues, while industry-specific news flows would continue to drive sectoral movements.