Crude, rupee & global trade concerns to determine market this week

The key determinant, however, is set to be crude oil. Any continued increase would see a heavy impact on the Indian market.
Bombay Stock Exchange (File Photo| Reuters)
Bombay Stock Exchange (File Photo| Reuters)

NEW DELHI: The week ahead for the stock markets is set to be determined by a variety of factors, three of the most important of which are external in nature. According to market analysts, the status of crude prices, the value of the Rupee and developments in the tariff battle that is just beginning will set the course for the bourses. 

“Domestic market is expected to trade in a range-bound manner with a negative bias in the near term as investors will adopt a risk-off approach on concerns of global trade tensions, rising oil prices and macro worries,” noted Vinod Nair, Head of Research, Geojit Financial Services, in his weekly note. 

The large consensus among brokerages and market analysts is that volatility is expected to remain high going forward this week. “Volatility is likely to remain, owing to negative global cues as well as domestic factors such as elections, pressure on CAD and fiscal deficit from higher crude prices,” Teena Virmani, Vice President of Research, Kotak Securities Ltd, said.

While a good early monsoon season, better GDP growth and continued flow of domestic money is set to mitigate any sharp negative falls, volatility in oil prices and many falls in the Rupee will exacerbate negative sentiments. 

Meanwhile, manufacturing activity data will also PMI data influence trading sentiment this week. 
The key determinant, however, is set to be crude oil. Any continued increase would see a heavy impact on the Indian market, since costlier oil is likely to upset India’s macroeconomic balance — resulting in a wider trade deficit and higher inflation.

(With inputs from agencies)

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