Analysts predict that the direction of stock market movements this week will be dictated by crude oil prices, geopolitical tensions in the Middle East, and upcoming inflation data.
Experts also noted that for the Indian stock market, key factors to watch will remain events related to the Strait of Hormuz, foreign investor activity, and domestic quarterly company reports.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, stated that investors will closely monitor the release of the July Consumer Price Index (CPI), the Wholesale Price Index (WPI), and the latest data on foreign exchange reserves to gain fresh insights into inflation trends and external sector stability. Furthermore, the first quarter reporting season of financial year 27 will provide an additional boost, as several companies, including HAL, Bharat Forge, Grasim Industries, and Tata Motors, have scheduled their quarterly results announcements.
Globally, market participants will continue to track developments around the Strait of Hormuz, fluctuations in crude oil prices, and broader geopolitical negotiations involving Iran.
Key themes of the week
According to Ponmudi R, CEO of Enrich Money, two main themes will dominate this week: events in West Asia and the US July inflation report. The primary focus will be on West Asia, where negotiations regarding the Strait of Hormuz remain uncertain.
At the macroeconomic level, the key global event will be the US July inflation report. Crude oil will also remain an important indicator for Indian markets.
Meanwhile, Foreign Portfolio Investors (FPIs) continued to increase purchases in Indian stocks, investing ₹12,921 crore in the first week of August.
Last week, the BSE Sensex index rose by 404.53 points, representing 0.51 percent, and the NSE Nifty index increased by 187.05 points, or 0.76 percent.
Mishra noted that markets ended the week with moderate growth despite increased volatility, as investors adapted to the introduction of the new Closed Auction Session (CAS) structure for F&O stocks, the Reserve Bank of India's monetary policy decision, and persistent geopolitical uncertainty.
The Closed Auction Session was the main event of last week, as it was the first week of operation of the new system, according to Santosh Mina, Head of Research at Swastika Investmart Ltd.
Santosh Mina added that the week will also be important from a macroeconomic perspective: India plans to publish CPI inflation data on August 12, and WPI data on August 14. In the US, CPI and PPI (Producer Price Index) data will be released on August 12 and 13, respectively.
