Investors are bracing for a cautious start to the week following a sharp decline in US markets at the end of last week. Analysts note that investors will be keeping a close eye on two critical factors: how rising tensions in West Asia impact crude oil prices, and the activity of foreign investors this week.
Speaking to news agency PTI, Ajit Mishra, Senior Vice President at Religare Broking Ltd, expects this week the market direction will be driven by incoming global inflation numbers and macroeconomic data.
An Eye On May Inflation Data
In India, investors will focus on the May inflation data and foreign exchange reserves figures, both scheduled to be released on June 12. Key economic data points will also be released in the United States and China during the week.
This global uncertainty comes after the BSE Sensex fell 532.4 points and the NSE Nifty dropped 181.05 points last week.
However, Santosh Meena, head of research at Swastika Investmart Ltd., stated that domestic markets will be supported this week by strong GDP growth.
The Impact Of Oil Price
According to a report by rating agency Crisil, India’s oil marketing companies are reducing their losses after oil prices were increased by a total of Rs 7.5 in four phases since May 15.
Petrol and diesel prices have already risen by approximately Rs 7.5 per litre in four phases since May 15. According to the report, the cumulative fuel increase in petrol and diesel prices could reach Rs 10 in the near term, giving further relief to these companies.
The report further warned that rising petrol and diesel prices are likely to put new inflationary pressure on the Indian economy, with rising transportation and manufacturing costs likely to push up consumer prices in the coming months.