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The domestic stock market is expected to remain volatile this week as investors track the Reserve Bank’s monetary policy decision, key global macroeconomic data and the impact of the West Asia conflict, PTI reported quoting analysts.
Movements in crude oil prices and foreign fund flows will also influence domestic equities, analysts added.
Breaking It Down
Powered via AI“A rate pause is near-certain consensus, the central bank walks a tightrope between crude-driven inflation risks and a four-year low Manufacturing PMI signalling a softening growth impulse. The governor’s commentary on the rate cycle trajectory and FY27 projections will be closely monitored.
“Globally, the US March CPI reading will carry significant importance, as it buries residual Fed rate-cut hopes, strengthens the dollar and tightens financial conditions for emerging markets, including India,” Nair said.
He noted that geopolitical developments in West Asia will remain the overarching factor influencing market sentiment, as per PTI.
“Indian markets return after a three-day gap and remain acutely vulnerable to weekend war developments, with crude trajectory and any credible ceasefire signal being the decisive variable that could either trigger a sharp relief rally or extend the current sell-on-rise mode,” Nair added.
Brent crude prices have remained elevated near $107 per barrel, sustaining concerns around imported inflation. Currency pressures have also intensified, with the rupee weakening sharply before recovering towards Rs 93 against the US dollar, aided by RBI intervention, he added.
Foreign institutional investor (FII) selling remains another key overhang, with March witnessing intense outflows of Rs 1.2 lakh crore, among the highest monthly outflows in the last several years, according to PTI.
“Investors will monitor the US Federal Open Market Committee (FOMC) meeting minutes, GDP data, and initial jobless claims for further cues on growth and the policy trajectory.
“Overall, markets are expected to remain volatile as geopolitical developments, crude price movements, FII flows and global macro data continue to drive sentiment,” Khemka said.
According to analysts, any signs of de-escalation in the West Asia conflict may provide relief through softer crude prices and currency stability, while further escalation could prolong risk aversion and sustain pressure on foreign flows. (With Agency Inputs)
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
Akshat Mittal is the Chief Copy Editor at ET NOW with over 6 years of experience, specialising in Markets, Personal Finance, and General News. Before joining ET NOW, he worked with prominent media organisations and has reported on numerous major events firsthand.
He has also conducted several high-profile interviews on topics such as the 8th Pay Commission and the IMF’s loan to Pakistan amid Operation Sindoor.
Akshat has been involved in numerous key business launches, covering these events on the ground. His articles are widely published in national magazines and newspapers, where he has conducted several interviews with prominent political figures.
He was the first to bring out the IMF spokesperson’s statement on the voting pattern of the Executive Directors, following reports claiming that ‘no is not an option’ in the IMF voting procedure.
Akshat is passionate about public speaking and has delivered numerous lectures at colleges and schools. He also served as a member of a Youth Parliament in Delhi.
