As Indian shares ended their longest weekly losing streak on Friday, investors are anticipating the performance of equities in the upcoming weeks. Crude oil at $100 a barrel, inflation data from the US and India, the rupee’s movement, bond yields across the globe, and corporate earnings are going to be the determinants of the Indian share market’s trajectory.
Indian stock market indices recorded a recovery at the close of the week as buying was recorded across sectors. Investors’ engagement with information technology (IT), fast-moving consumer goods (FMCG), automobile and financial stocks helped boost the market outlook. 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.
Investors would continue to track developments across domestic and global markets to ascertain the sustainability of the rebound, as several factors continue to pose challenges to the Indian market. A weakening rupee, tighter US monetary policy, continued foreign capital outflows, and persistently higher crude prices could keep the domestic benchmark indices under pressure, even as the Indian market recovered, breaking its eight-week losing streak.
Geopolitical uncertainties have emerged as a key driving force in the domestic market, with crude prices likely to influence Dalal Street. The current state of affairs surrounding the Middle East crisis, the Strait of Hormuz, and regional energy infrastructure, in particular, raises concerns over possible supply disruptions. Brent crude is trading above the $100-per-barrel mark, while West Texas Intermediate (WTI) remains above $90.
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 the broader market direction.
Global monetary policy expectations and bond-market movements will remain important throughout the week.
(With inputs from IANS)
