The Indian stock market remained range-bound last week, with the Sensex losing about 500 points and the Nifty falling 205 points. Investors are now expected to focus on four key factors that could influence market movement from August 17 to 21.
On Friday, both benchmark indices ended slightly lower despite crude oil prices stabilising around $87 a barrel. The Sensex fell 71 points to close at 78,009, while the Nifty 50 declined 30 points to 24,366. The broader market also weakened, with the Nifty Smallcap 100 and Nifty Midcap 100 falling about 0.7% each.
Geojit Investments Head of Research Vinod Nair said the market stayed range-bound amid high crude prices and continued global uncertainty. Softer-than-expected US labour data had initially raised hopes that the US Federal Reserve would maintain a cautious approach to interest rates. However, the rise in crude prices brought inflation concerns back into focus.
On the domestic front, better-than-expected corporate earnings, a stable rupee, lower domestic bond yields and some improvement in foreign investor participation provided support.
Nair said strong first-quarter FY27 earnings by Nifty 50 companies exceeded market expectations. As many as 33 index constituents beat estimates, pointing to continued strength in corporate earnings. Mid-cap stocks performed better than large caps during the week, supported by improved earnings prospects.
Crude oil prices
Crude oil prices are likely to remain a key factor for Indian equities. Oil prices rose after attacks on tankers and a lack of progress in peace talks between the US and Iran.
Brent crude settled at $88.52 a barrel, gaining nearly 2%, while US West Texas Intermediate crude rose more than 1% to $82.40.
The US has also indicated that it could continue its naval blockade of Iran and increase economic pressure on the country amid stalled ceasefire talks. Any further rise in oil prices could put pressure on Indian markets.
Middle East tensions
Developments in the Middle East could also affect investor sentiment.
Iran said Qatar was holding three of its pilots who had been missing since March, a claim denied by Qatar. The UAE accused Iran of attacking one of its vessels in the Strait of Hormuz, while Iran-backed Houthis carried out another attack on a Red Sea port in Yemen.
In southern Lebanon, Israeli airstrikes killed 11 people. The developments have raised concerns that tensions in the region could worsen and unsettle global markets.
FOMC minutes
Investors will closely watch the minutes of the US Federal Reserve’s latest meeting, at which interest rates were kept unchanged.
The minutes could provide clues about the Fed’s thinking on future rate decisions, including the possibility of a rate hike next month. However, a surprise fall in US retail sales has reduced expectations of a near-term rate increase.
FII flows
Foreign Institutional Investors (FIIs) were net buyers of Indian equities on Friday, purchasing shares worth Rs 508 crore.
According to Bajaj Broking Deputy Vice President-Research Pabitro Mukherjee, FIIs were net buyers of Rs 1,228.24 crore for the week. They bought shares in the first two sessions, turned sellers in the next two and returned to buying on the final day.
Domestic Institutional Investors (DIIs) were also steady buyers, recording net purchases of Rs 9,285.63 crore during the week, with buying in all but the first session.
Despite the strong DII support, the Nifty slipped from 24,584 to 24,366 during the week.
Global cues in focus
Nair said investors will track crude oil prices, geopolitical developments, US retail sales, the FOMC minutes and Chinese economic data in the coming week.
These factors are likely to provide clues about global economic growth, inflation and the future direction of US monetary policy.
