- A ticking water time bomb in Mudasarlova catchment area
- Vizag synonymous with Google gazillion data centre
- Vizag all set to ride data centre boom!
- KTR on turncoats: KCR will return to power in two years and settle scores
- End-to-end diaphragm wall may be needed for Medigadda Barrage: Uttam
- Nizamabad soldier missing for a year, family to approach court
- Odisha Floods: CM Mohan Charan Majhi tours flood-ravaged Kotpad
- Telangana Tourism rolls out an array of initiatives; gets a digital makeover
Crude, geopolitics to drive stock market trends this week
In Short
August industrial output, manufacturing PMI and auto sales also in focus
Share :
Crude, geopolitics to drive stock market trends this week
New Delhi: Investors will focus on geopolitical developments, crude oil prices, bond yields and macroeconomic data announcements to determine market trends during the holiday-shortened week ahead, analysts said. According to experts, the US-Iran diplomatic talks and crude oil prices will drive global market sentiment. Moreover, the market is likely to remain cautious as crude oil prices, geopolitical developments and global bond yields continue to influence near-term direction, they said.
Equity markets would remain closed on Friday for Mahatma Gandhi Jayanti. "Globally, developments around US-Iran diplomacy and crude oil prices will remain critical. Any progress on a framework for reopening the Strait of Hormuz could ease energy prices and provide some relief to India's import bill and the rupee, while renewed geopolitical tensions could keep volatility elevated," Ajit Mishra, SVP – Research, Religare Broking, said. On the domestic front, industrial production data for August and the HSBC manufacturing PMI reading will be released during the week, he added.
Additionally, market participants will closely monitor foreign institutional investor (FII) activity and the upcoming monthly auto sales figures. "Global bond yields will also remain important following the Federal Reserve's September policy decision. Further increases in yields and the dollar could weigh on emerging-market capital flows, while a moderation in yields could provide some relief.
"The rupee will remain another important factor to watch, with persistent oil-related demand for dollars and continued FII outflows potentially keeping the currency under pressure, although RBI intervention has helped contain excessive volatility," Ponmudi R, CEO - Enrich Money, an online trading and wealth tech firm, said. In addition, a series of economic data releases from the US will also be important for global risk sentiment, he added.
Last week, the BSE benchmark Sensex declined 399.22 points, or 0.53 per cent, and the NSE Nifty dipped 205.9 points, or 0.88 per cent. "Brent crude near USD 105–106 a barrel remains too elevated to provide meaningful macroeconomic relief. Progress in the US-Iran negotiations could help reduce the geopolitical premium in oil prices, while renewed escalation or supply disruptions could intensify inflationary pressures.
"The US 10-year Treasury yield, currently near 5.2 per cent, will remain another important constraint on global risk appetite," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said. The combination of higher oil prices, elevated yields and geopolitical uncertainty contributed to the sharp sell-off seen during the middle of last week, Ponmudi said. Elevated yields continue to tighten global financial conditions and can reduce the relative attractiveness of emerging-market assets, he added.
According to Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services, markets will track India's August industrial production and the federal fiscal deficit for cues on domestic momentum and the consolidation path. Globally, US consumer confidence and JOLTS job openings, and the eurozone September inflation cluster will shape expectations around the global rate cycle.
