India-US trade deal, oil prices and geopolitical tensions to guide D-Street next week
Mumbai, June 28
After ending the holiday-shortened week on a positive note, Dalal Street is likely to take cues from progress in the proposed India-US trade agreement, developments in the Middle East conflict, crude oil prices and foreign investor activity in the coming week.
Lower oil prices and improving risk sentiment helped benchmark indices post modest gains during the last week.
For the week, the Sensex advanced 0.39 per cent to close at 77,100.47, while the Nifty gained 0.18 per cent to settle at 24,056.
A sharp decline in crude oil prices emerged as the biggest positive trigger for the market. With tanker traffic through the Strait of Hormuz returning to normal and tensions in West Asia showing signs of easing, Brent crude prices retreated to near pre-conflict levels.
The decline in oil prices reduced concerns over imported inflation, the current account deficit and rising input costs for Indian companies.
Investor sentiment also improved amid growing expectations of an India-US trade agreement. Commerce and Industry Minister Piyush Goyal said India and the United States are close to concluding a trade deal following discussions with US Trade Representative Jamieson Greer. Market participants view the proposed agreement as an important step toward strengthening bilateral economic ties and boosting trade and investment flows.
At the same time, geopolitical developments in West Asia continued to remain on investors' radar. The United States carried out strikes on Iran after a drone attack on a cargo vessel in the Strait of Hormuz, an incident that US President Donald Trump described as a violation of the ceasefire agreement. Earlier, a vessel near the coast of Oman was reportedly struck by a projectile, highlighting continuing tensions in the region despite ongoing diplomatic efforts.
Crude oil prices fell more than 3 per cent on Friday and were headed for sharp weekly losses as concerns over supply disruptions eased. The continued movement of oil tankers through the Strait of Hormuz helped calm markets and reduced fears of a major supply shock.
Meanwhile, the Indian rupee strengthened during the week, supported by lower crude oil prices and signs of improving foreign portfolio inflows. However, investors remained cautious over the possibility of further interest rate actions by the US Federal Reserve, which could influence global capital flows.
— IANS
Reader Comments
While lower oil prices are a relief, we can't ignore the geopolitical risks. The Strait of Hormuz situation could flare up anytime. Also, the Fed's rate decisions will keep markets volatile. Be cautious, folks. Not everything is rosy.
The India-US trade deal could be a game-changer for our exports! But I hope it's balanced and doesn't hurt our small businesses. Piyush Goyal ji needs to negotiate hard. 🤞
Market up 0.39% in a holiday-shortened week? That's decent but nothing to write home about. I'm more worried about FII outflows if the Fed hikes rates again. Let's see how next week plays out. 🧐
As a retail investor, I'm happy to see crude prices falling. It directly impacts our fuel costs and inflation. But the West Asia situation is scary—hope diplomacy prevails. 🙏
Interesting times for global markets. The India-US trade deal could set a positive precedent for emerging economies. But the Fed's next move is the real wildcard. Stay diversified, people.
Lower oil prices are great for our economy, but let's not forget that geopolitical
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.