As the new trading week begins, Indian equity markets are set to be driven by a confluence of geopolitical developments, crude oil prices, and a series of domestic economic data releases, according to analysts.
Geopolitical Tensions and Crude Oil
Geopolitical risks remain elevated following the latest military exchanges involving the US and Iranian forces, as reported by the Business-Today article. While broader diplomatic efforts remain in place, Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, stated that markets are likely to remain sensitive to developments on the geopolitical front. He noted that any signs of renewed negotiations or de-escalation could help sustain recent risk sentiment improvement, while a further deterioration may prompt a reassessment of global growth and energy market expectations.
Ajit Mishra, SVP of Research at Religare Broking Ltd, added that the trajectory of crude oil prices and geopolitical developments in the Middle East would remain key drivers of market sentiment.
Domestic Economic Calendar
A packed domestic economic calendar is expected to keep investors focused. Key data releases include:
- Index of Industrial Production (IIP) for May
- Final HSBC Manufacturing PMI, Services PMI, and Composite PMI readings
- Foreign exchange reserves data
Mishra, quoted by PTI, said, "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."
Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services Ltd, said investors will also track key economic releases from the US, including the US manufacturing index.
Monsoon Progress and Auto Sales
Apart from macroeconomic data, the progress of the southwest monsoon will remain a key area of focus for investors, according to Ponmudi R. Additionally, monthly auto sales numbers, scheduled to be released on July 1, will be watched for indications of consumer demand and broader economic activity.
Last Week's Market Performance
Last week, Dalal Street ended with modest gains. The BSE Sensex rose 297.57 points, or 0.38%, while the NSE Nifty advanced 42.9 points, or 0.17%, as per the source.
The following table summarises the key economic data releases expected this week:
| Indicator | Country | Period |
|---|---|---|
| Industrial Production (IIP) | India | May |
| HSBC Manufacturing PMI (Final) | India | May |
| HSBC Services PMI (Final) | India | May |
| HSBC Composite PMI (Final) | India | May |
| Foreign Exchange Reserves | India | Weekly |
| US Manufacturing Index | US | May |
| Monthly Auto Sales | India | June |
For executives and investors, the interplay between geopolitical stability and domestic economic momentum will be critical in determining near-term market direction. The outcome of diplomatic efforts in the Middle East, combined with the strength of Indian industrial output and service sector activity, will likely influence portfolio allocations in the coming sessions.
Sources:
