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The Indian stock market ended last week with gains of nearly 3%, recovering from early losses despite continued volatility in global markets. Experts believe the market’s direction this week will depend on several domestic and international developments, including the Reserve Bank of India’s (RBI) monetary policy decision, crude oil prices and global economic trends.
The benchmark indices continued their upward movement on Friday. The Sensex rose 166.5 points to close at 78,095, while the Nifty 50 gained over 66 points to finish at 24,384. Broader markets also ended higher, with the Nifty Midcap 100 and Nifty Smallcap 100 indices both posting gains.
RBI Monetary Policy
The RBI is expected to announce the outcome of its Monetary Policy Committee (MPC) meeting on August 5. Most analysts expect the central bank to keep the repo rate unchanged at 5.25%.
Investors will closely watch the RBI’s comments on inflation, liquidity and economic growth. Market experts believe the central bank may continue with a cautious approach while focusing on maintaining adequate liquidity.
Middle East Tensions
The ongoing conflict involving the United States and Iran remains another key factor for investors. US President Donald Trump has warned of further military action against Iran, while tensions around the Strait of Hormuz continue to disrupt shipping.
Any further escalation in the region could affect global financial markets and investor sentiment.
Crude Oil Prices
Oil prices ended higher last week, recording their biggest monthly gain since March. Reports of disruptions to tanker movement through the Strait of Hormuz have raised concerns over global oil supplies.
Higher crude oil prices could increase inflationary pressures, which may affect market confidence.
Foreign Investor Activity
Foreign institutional investors (FIIs) have returned as net buyers after several sessions of selling. Market experts note that foreign investors have also shown increasing interest in Indian mid-cap and small-cap stocks due to their growth potential.
India’s relatively stable currency and reasonable valuations in large-cap stocks have also supported foreign investment.
Global Technology Stocks
Technology shares worldwide have recovered after recent losses, helped by strong quarterly results from major companies such as Microsoft and Amazon.
Analysts say that if global technology stocks continue to attract investment, some funds could shift away from markets like India. However, India’s stable market conditions continue to make it attractive for foreign investors.
Corporate Earnings Season
Around 573 companies are scheduled to announce their April–June quarter (Q1 FY27) results this week. Major companies expected to report include Trent, State Bank of India (SBI), Nykaa, Bharti Airtel and Titan.
The financial results will provide important signals about the health of different sectors and could influence market sentiment.
Outlook for the Week
Analysts believe the market’s recovery will depend on easing global uncertainties, stable crude oil prices and stronger corporate earnings across a wider range of sectors.
Apart from the RBI’s policy decision, investors will also keep an eye on US labour market data and India’s Purchasing Managers’ Index (PMI) figures, which are expected to provide further clues on economic growth and inflation.
Experts continue to recommend gradually investing in fundamentally strong companies with consistent earnings prospects.
