TEAM FINANCE
The Indian stock market finished the past week in the red, although the Sensex and Nifty recovered some ground towards the end of the week after a prolonged losing streak.
On Friday, the Sensex rose marginally by more than 3 points to close at around 77,541, while the Nifty 50 gained 20 points to settle at 24,252. Despite the late recovery, the Sensex fell over 0.6% during the week, while the Nifty declined by around 0.5%.
The movement of crude oil prices, developments in the Middle East, bond yields and key economic data from the US are expected to influence the markets in the week from August 24 to August 28.
Iran-US tensions
Investors will closely watch developments between the United States and Iran after both countries exchanged strong statements ahead of a possible announcement of fresh US economic sanctions on Monday.
US Treasury Secretary Scott Bessent is expected to address the media, with Washington indicating that it could impose very strict sanctions on Iran and urging China to cooperate. China remains a major buyer of Iranian oil, accounting for more than 80% of Iran’s oil purchases, according to 2025 data from analytics firm Kpler.
Iran has strongly criticised the possible sanctions. Foreign Ministry spokesperson Esmaeil Baghaei said on Saturday that such measures amounted to an attempt by the US to extend its authority over other independent countries.
Rising tensions in the oil-producing Middle East region could unsettle investors and increase volatility in global markets.
Crude oil prices
Oil prices will be another major factor for the markets this week. Brent crude ended the previous session near $95 a barrel, while West Texas Intermediate crude moved above $87.
Concerns over the continued closure of the Strait of Hormuz, a key route for global oil shipments, have pushed prices higher. Crude had earlier surged close to $130 a barrel before falling towards $80 after an interim peace agreement eased supply concerns.
However, fresh tensions have raised fears over oil supplies once again, leading to another increase in prices. Higher crude prices are a concern for India as they can increase inflation and put pressure on the economy.
Bond yields in focus
Bond yields also rose sharply last week. The yield on India’s 10-year benchmark bond touched a two-month high of 6.88% on Friday before easing to 6.85% by the close. The yield increased by nearly 10 basis points during the week, marking its biggest weekly rise of the current financial year.
US bond yields also moved higher. The yield on the benchmark 10-year US Treasury note rose to 4.736%, while the 30-year yield reached 5.276%. The two-year yield increased to 4.24%.
Higher bond yields can make fixed-income investments more attractive and may reduce investor interest in equities, putting pressure on stock markets.
Key US economic data
Global investors will also watch important economic developments in the US. Federal Reserve Chairman Kevin Warsh’s speech will be closely followed for indications about the future direction of US interest rates.
US PCE inflation data, the Federal Reserve’s preferred measure of inflation, will also be important. Investors will additionally monitor upcoming US inflation and GDP figures for further clues on the global interest rate outlook.
What lies ahead for Dalal Street?
Indian equities remained under pressure last week as rising oil prices and high global bond yields made investors cautious, according to Vinod Nair, Head of Research at Geojit Investments.
He said crude oil moving above $90 a barrel revived concerns about imported inflation and contributed to a sharp fall in the markets during the middle of the week. However, buying in financial stocks and the strength of domestic economic fundamentals helped the markets recover some losses towards the close.
Gold performed strongly as investors turned to safe-haven assets and used the metal as a hedge against inflation.
Nair said investors showed interest in realty, metals and private banks, supported by firm commodity prices, healthy credit growth and attractive valuations following the recent correction. IT and FMCG stocks, however, faced selling pressure due to concerns over global technology spending and rising input costs.
Small-cap stocks performed better than the main indices, helped by stronger earnings prospects and their greater exposure to the domestic economy.
Technical outlook for Nifty
Rupak De, Senior Technical Analyst at LKP Securities, said the Nifty remained range-bound and continued to trade between the 20 EMA and 50 EMA on both the hourly and daily charts.
He said the RSI remained in a bearish crossover, although the overall market outlook was sideways to mildly positive.
According to De, immediate support for the Nifty is at 24,200. A fall below this level could pull the index towards 24,000. On the upside, resistance is seen at 24,350, and a move above this level could take the Nifty towards 24,500.
