Markets Ahead: Fresh Tensions in West Asia, Crude Price Movement Key Factors to Watch Out for

Developments on the geopolitical front, with the latest military exchanges involving the US and Iran, their impact on crude oil prices and domestic macroeconomic data announcements would dictate sentiments in the stock market this week, analysts said.

Besides, trading patterns of foreign investors and progress of the southwest monsoon would also remain the key areas of focus for investors, they added.

"Market participants will closely monitor Industrial Production (IIP) data, the final HSBC Manufacturing, Services and Composite PMI readings, and the foreign exchange reserves data for fresh insights into the health of the domestic economy," Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

Globally, the trajectory of crude oil prices and geopolitical developments in West Asia will remain key drivers of market sentiment, he said.

The monthly auto sales numbers on July 1 will also be tracked by investors closely.

"The week ahead is likely to be shaped by developments on the geopolitical front, with investors closely monitoring tensions in the Middle East following the latest military exchanges involving US and Iranian forces. While broader diplomatic efforts remain in place, the recent flare-up has reminded markets that geopolitical risks remain elevated.

"Any signs of renewed negotiations or de-escalation could help sustain the recent improvement in risk sentiment, while a further deterioration in relations may prompt a reassessment of global growth and energy market expectations," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

On the domestic front, the progress of the southwest monsoon will remain a key area of focus for investors, he said.

Last week, the BSE benchmark Sensex climbed 297.57 points, or 0.38 per cent, and the NSE Nifty went up by 42.9 points, or 0.17 per cent.

"Key data releases this week include India’s manufacturing PMI and industrial production data for May, along with the US manufacturing index," Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.