Crude oil, inflation data among top factors to drive stock market next week

New Delhi: Crude oil prices above $100 a barrel, key inflation data in India and the US, movements in the rupee, global bond yields and a pickup in corporate earnings are likely to determine the trajectory of Indian equities in the coming week, as investors assess whether the recent rebound can sustain after eight consecutive weeks of losses.

Domestic benchmark indices staged a sharp recovery on Friday, with buying across information technology (IT), fast-moving consumer goods (FMCG), automobile and financial stocks lifting market sentiment. The Nifty rose 288.65 points, or 1.30 per cent, to close at 22,520.45, while the Sensex advanced 879.09 points, or 1.23 per cent, to settle at 72,472.33.

The gains helped both benchmark indices break their eight-week losing streak. However, persistent foreign investor outflows, elevated crude oil prices, a weakening rupee and concerns over tighter monetary policy continue to pose challenges for the market.

With important macroeconomic indicators due in India and the US, alongside a busy corporate earnings calendar, investors will closely track developments across domestic and global markets to gauge the sustainability of the recovery.

One of the biggest factors likely to influence Dalal Street will be crude oil prices. Brent crude is trading above the $100-per-barrel mark, while West Texas Intermediate (WTI) remains above $90. Uncertainty surrounding Iran, the Strait of Hormuz and regional energy infrastructure has heightened concerns over possible supply disruptions.

Inflation data and movements in US bond yields will also be closely watched. In the US, the September Consumer Price Index (CPI) report, scheduled for release on Wednesday, will provide fresh insight into price pressures and help investors assess the Federal Reserve's next policy move. US retail sales data will also be in focus, as stronger-than-expected readings could keep Treasury yields and the dollar elevated, potentially weighing on emerging-market equities.

In India, September CPI and wholesale price index (WPI) inflation figures will offer important clues about domestic price trends and their implications for monetary policy. Any indication of persistent inflation could influence expectations around interest rates and investor sentiment, while movements in the rupee will remain an important indicator of pressure from elevated oil prices and foreign capital outflows.

Corporate earnings will be another key driver as the results season gathers pace. Investors will assess companies' revenue growth, profit margins, management commentary and demand outlook to determine whether earnings can support market valuations amid a challenging economic environment. Results from Indian companies, alongside major corporate announcements in the US, could influence sector-specific movements and broader market direction.

Global monetary policy expectations and bond-market movements will remain important throughout the week.

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