Middle East war, oil prices to steer markets in holiday-shortened week; rupee and FII flows in focus
Developments in the month-long war in Middle East, movements in crude oil prices and broader global cues are expected to remain the biggest triggers for Indian stock markets in the holiday-shortened week ahead.Analysts cited by news agency PTI said that investors will also closely track the rupee’s movement against the US dollar and the trading pattern of foreign institutional investors, with sentiment likely to stay fragile amid continued geopolitical uncertainty.Domestic equity markets will be shut on Tuesday for Shri Mahavir Jayanti and again on Friday for Good Friday, leaving traders with a shortened week.
Oil, ceasefire talks and rupee stability in focus
Ajit Mishra, SVP, research at Religare Broking Ltd, told PTI that global macro developments are likely to dominate market direction in the coming sessions.“This week is expected to remain influenced by global macro developments, particularly crude oil price trends and progress in the US-Iran ceasefire negotiations, which will be critical in shaping market sentiment. Stability in the rupee will also be important for any revival in foreign institutional flows,” Mishra said.On the domestic front, Mishra said investors will watch key economic indicators including industrial production data for February and the HSBC Manufacturing PMI for March, which could offer a clearer picture of economic momentum and fiscal positioning.The pressure on equities has already been visible. Foreign investors have withdrawn Rs 1.14 lakh crore (around $12.3 billion) from domestic equities this month amid the widening conflict in Middle East and the weakening rupee.The conflict in the Middle East began on February 28. Since then, the US and Israel have struck Iran, while Tehran has responded by targeting Washington’s regional allies and Tel Aviv.
Markets seen staying volatile after last week’s losses
Ponmudi R, CEO of Enrich Money, told PTI that markets are likely to remain highly sensitive to any shift in the geopolitical situation.“Looking ahead, markets are likely to remain volatile and driven by developments on the geopolitical front. Investors will be closely watching the situation in the Middle East, where any escalation or signs of easing could quickly shift sentiment, particularly through their impact on crude oil prices”, he said.“Elevated oil prices are expected to keep pressure on markets, while any pullback could prompt short-covering and support a rebound”.He added that foreign fund flows, rupee movement and broader global market trends will also shape the near-term outlook.Hariprasad K, research analyst and founder of Livelong Wealth, also said that the week ahead will largely be driven by global factors.“The week ahead is expected to be largely dictated by global drivers, with crude oil, currency movements, and geopolitical developments remaining key variables,” he said.In the holiday-shortened week gone by, the BSE Sensex fell 949.74 points, or 1.27 per cent, while the NSE Nifty dropped 294.9 points, or 1.27 per cent, reflecting the pressure from global volatility.
Top firms lose Rs 1.75 lakh crore in market value
The broader market mood remained weak last week, with the combined market valuation of seven of the top-10 most valued firms shrinking by Rs 1.75 lakh crore, led by a sharp erosion in Reliance Industries, which took the biggest hit.Reliance Industries alone lost Rs 89,720.3 crore in market capitalisation, while HDFC Bank shed Rs 37,248.59 crore and State Bank of India lost Rs 35,399.42 crore. ICICI Bank, Bharti Airtel, Hindustan Unilever and TCS also saw declines.However, Larsen & Toubro, Bajaj Finance and Infosys bucked the trend and posted gains in market valuation.Religare’s Mishra said last week saw sharp swings, with early losses driven by fears over energy supply disruption, a record-low rupee and rising volatility. This was followed by a mid-week recovery on hopes of a temporary easing in US-Iran tensions, before renewed selling pressure on Friday wiped out those gains.
