West Asia conflict, crude oil prices to drive markets next week: Analysts

New Delhi: Developments related to the ongoing month-long war in West Asia, its impact on crude oil prices, and global trends would continue to be key drivers for domestic equities in the holiday-shortened week ahead, analysts said.

Besides, the rupee-dollar trend and trading activity of foreign investors would also play a crucial role in dictating investors’ sentiment.

Stock markets would remain closed on Tuesday and Friday for Shri Mahavir Jayanti and Good Friday, respectively.

“This week is expected to remain influenced by global macro developments, particularly crude oil price trends and progress in the US-Iran ceasefire negotiations, which will be critical in shaping market sentiment. Stability in the rupee will also be important for any revival in foreign institutional flows,” Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

On the domestic front, key data releases include industrial production data for February and the HSBC Manufacturing PMI for March, which will provide insights into economic momentum and fiscal positioning, he said.

Foreign investors have pulled out Rs 1.14 lakh crore (about $12.3 billion) from domestic equities this month amid the widening conflict in West Asia and a weakening rupee.

The West Asia conflict started on February 28. While the US and Israel attacked Iran, the Islamic Republic retaliated by targeting Washington’s allies in its neighbourhood and Tel Aviv.

Foreign investor flows, moves in the rupee, and broader global market trends are also likely to play a key role in shaping the near-term outlook, he said.

In a holiday-shortened last week, the BSE benchmark Sensex lost 949.74 points or 1.27 per cent, and the NSE Nifty tanked 294.9 points or 1.27

per cent.