5 key triggers likely to drive Indian stock market next week
Mumbai, Aug 16
The Indian stock market is likely to remain volatile next week as investors track the US Federal Reserve's meeting minutes, developments in the US-Iran conflict, elevated crude oil prices, foreign fund flows and movements in gold prices.
After ending the week on a weak note, market participants are expected to closely monitor global cues and assess their implications for inflation, the rupee and corporate earnings.
The Sensex declined 0.62 per cent over the week to close at 78,009.25, while the Nifty fell 0.83 per cent to 24,366.
The broader market delivered a mixed performance, with the MidCap index gaining 0.50 per cent, while the SmallCap index declined 0.66 per cent.
A key trigger for domestic equities will be the release of the minutes of the US Federal Open Market Committee's July 28-29 meeting on August 19.
The minutes are likely to provide greater clarity on the debate within the US central bank after policymakers voted 9-3 to keep the federal funds rate unchanged at 3.50 per cent-3.75 per cent.
Geopolitical developments surrounding the US-Iran conflict will remain another major focus for markets.
Iran's Deputy Foreign Minister Kazem Gharibabadi has reiterated Tehran's position on the Strait of Hormuz, saying the strategic waterway has been, and will remain, under Iranian control.
Crude oil prices will therefore remain closely watched. Oil futures rose more than $1 a barrel on Friday amid attacks on tankers and a lack of significant progress towards a peace agreement between the Trump administration and Iran.
For India, sustained high crude prices could add pressure on inflation, the rupee and corporate margins, particularly for sectors with high energy and transportation costs.
A further rise in oil prices could consequently weigh on investor sentiment and complicate expectations around domestic interest rates.
Foreign and domestic institutional flows will also remain an important market driver. Foreign institutional investors turned net buyers on August 14, purchasing shares worth Rs 12,854.44 crore and selling equities worth Rs 12,346.32 crore, resulting in net buying of Rs 508.12 crore.
Domestic institutional investors also remained buyers, with purchases of Rs 14,295.49 crore against sales of Rs 13,939.09 crore, resulting in net buying of Rs 356.40 crore.
— IANS
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