RBI rate decision, West Asia developments likely to steer markets this week

The domestic stock market is entering a significant trading week, with the RBI's interest rate decision, West Asia situation involving the US-Iran conflict, and crude oil prices emerging as the major driving factors for investors' sentiment, analysts said.

Besides, quarterly earnings and trading activity of foreign investors would also be tracked by investors to determine further movement, they added.

"This week is expected to be eventful, with the RBI Monetary Policy Committee (MPC) meeting (August 3-5) emerging as the key domestic trigger. Market participants will also closely monitor the ongoing Q1 FY27 earnings season, with several largecap and midcap companies scheduled to announce their results," Ajit Mishra SVP, Research, Religare Broking Ltd, said.

 

Globally, developments surrounding the US-Iran conflict, stability of crude oil supplies through key shipping routes will remain important drivers of market sentiment, he added.

After four straight months of selling, foreign investors turned net buyers of Indian equities in July, pumping in Rs 20,200 crore, aided by attractive valuations, improving corporate earnings and easing global headwinds.

Investor attention this week will remain firmly focused on geopolitical developments in West Asia, with any further escalation in the US-Iran conflict likely to have an immediate impact on crude oil prices and broader global risk sentiment, Ponmudi R, CEO - Enrich Money, an online trading and wealth tech firm, said.

Among major quarterly earnings this week are from earning DLF, Bharti Airtel, ONGC, Hero MotoCorp, LIC, and State Bank of India.

"Indian equities are expected to trade with a positive bias as healthy domestic macros, and a strong Q1FY27 earnings season continue to support investor confidence. Market participants will closely monitor the RBI's monetary policy decision, India's Manufacturing and Services Purchasing Managers' Index (PMI) data, along with developments in crude oil prices and geopolitical tensions in West Asia," Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

Last week, the BSE benchmark Sensex climbed 2,034.87 points, or 2.67 per cent, and the NSE Nifty surged 616.15 points, or 2.59 per cent.