A view of the Bombay Stock Exchange (BSE) in Mumbai. (Photo | ANI, FILE)
Business

Market Outlook: Fresh West Asia tensions, crude price swings to drive sentiment

The week ahead is expected to be shaped by geopolitical developments, with investors closely watching tensions in West Asia following the latest military exchanges between US and Iran.

TNIE online desk

Geopolitical developments, particularly the latest military exchanges between the US and Iran and their impact on crude oil prices, are expected to set the tone for the stock market this week, analysts said.

Investors will also be watching domestic macroeconomic data, foreign investor activity and the progress of the south-west monsoon, they added.

"Market participants will closely monitor Industrial Production (IIP) data, the final HSBC Manufacturing, Services and Composite PMI readings, and the foreign exchange reserves data for fresh insights into the health of the domestic economy," Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

Globally, the trajectory of crude oil prices and geopolitical developments in West Asia will remain key drivers of market sentiment, he said.

The monthly auto sales numbers on July 1 will also be tracked by investors closely.

The week ahead is expected to be shaped by geopolitical developments, with investors closely watching tensions in West Asia following the latest military exchanges between US and Iranian forces.

Although diplomatic efforts to ease the conflict continue, the latest escalation has served as a reminder that geopolitical risks remain high.

"Any signs of renewed negotiations or de-escalation could help sustain the recent improvement in risk sentiment, while a further deterioration in relations may prompt a reassessment of global growth and energy market expectations," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

On the domestic front, the progress of the southwest monsoon will remain a key area of focus for investors, he said.

Last week, the BSE benchmark Sensex climbed 297.57 points, or 0.38 per cent, and the NSE Nifty went up by 42.9 points, or 0.17 per cent.

"Key data releases this week include India's manufacturing PMI and industrial production data for May, along with the US manufacturing index," Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

(With inputs from PTI)

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