Investors to watch West Asia war, crude oil prices in holiday-short week: Analysts

The month-long war in West Asia, its impact on crude oil prices and global trends will be key drivers for domestic equities in the coming holiday-short week, analysts said.

Apart from this, the rupee-dollar trend and trading activity of foreign investors will also play a crucial role in investor sentiment.

Stock markets will be closed on Tuesday and Friday for Shri Mahavir Jayanthi and Good Friday.

“This week is expected to be influenced by global macro developments, particularly crude oil price trends and progress in the US-Iran ceasefire talks, which will be important in shaping market sentiment. A stability in the rupee will also be important for any revival in foreign institutional flows,” said Ajit Mishra, SVP, Research, Religare Ltd, Broking.

On the domestic front, key data releases include industrial production data for February and the HSBC manufacturing PMI for March, which will provide insights into economic momentum and fiscal conditions, he said.

Amid the widening conflict in West Asia and a weakening rupee, foreign investors this month pulled Rs. 1.14 lakh crore (about USD 12.3 billion) has been withdrawn.

The West Asia conflict began on 28 February. When the US and Israel attacked Iran, the Islamic Republic retaliated by targeting its neighbors and Washington’s allies in Tel Aviv.

“Looking ahead, markets are likely to remain volatile and driven by developments on geopolitical fronts. Investors will be closely watching the situation in the Middle East, where any signs of growth or easing can quickly change sentiment, particularly through their impact on crude oil prices.

“Elevated oil prices are expected to keep pressure on markets, while any pullback could encourage short-covering and support a rebound,” said Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm.

Foreign investor inflows, movements in the rupee and broader global market trends are also likely to play a major role in shaping the near-term outlook, he said.

In the holiday-short last week, the BSE benchmark Sensex was down 949.74 points or 1.27 percent, and the NSE Nifty was down 294.9 points or 1.27 percent.

Hariprasad K, research analyst and founder of Livelong Wealth, said, “The week ahead is expected to be largely determined by global drivers, with crude oil, currency movements and geopolitical developments remaining key variables.”