- Stock markets will react to US-Iran military exchanges and crude oil price changes this week
- Investors will monitor domestic economic data including IIP, HSBC PMI, and forex reserves
- Southwest monsoon progress and foreign portfolio investor activity will influence market sentiment
Stock markets this week are likely to take cues from the latest round of military exchanges between the US and Iran, with their knock-on effect on crude oil prices and a clutch of domestic economic data releases expected to set the tone for investor sentiment.
Foreign-portfolio-investor activity and the pace of the southwest monsoon's advance will also stay on investors' radar, according to news agency PTI.
"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, senior vice president of tesearch at Religare Broking Ltd, was quoted as saying by the news agency.
Globally, crude-oil price movement and the unfolding situation in West Asia will continue to be major influences on how markets behave through the week. Auto sales figures due on July 1 are also expected to draw close attention from traders, according to Mishra.
The coming days will largely be steered by how the Middle East situation evolves, according to Ponmudi R, chief executive officer of Enrich Money, an online trading and wealth tech firm.
"The week ahead is likely to be shaped by developments on the geopolitical front, with investors closely monitoring tensions in the Middle East following the latest military exchanges involving US and Iranian forces. While broader diplomatic efforts remain in place, the recent flare-up has reminded markets that geopolitical risks remain elevated," Ponmudi said. "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."
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Ponmudi added that on the domestic side, how the southwest monsoon progresses would remain an important factor for market participants to watch.
The BSE Sensex had gained 297.57 points, or 0.38%, while the NSE Nifty had risen 42.9 points, or 0.17%, over the course of last week.
Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services Ltd, said the manufacturing PMI and the IIP print for May, alongside the US manufacturing index, would be among the major data points investors track this week.
(With PTI inputs)
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