Geopolitics, Oil Prices to Steer Global Markets in Holiday-Shortened Week
Market analysts predict that geopolitical developments and crude oil prices will drive global market sentiment in the upcoming holiday-shortened week. The US-Iran diplomatic talks are a key area of focus, with any progress on a framework for reopening the Strait of Hormuz potentially easing energy prices and providing relief to India's import bill and the rupee. On the other hand, renewed geopolitical tensions could keep volatility elevated.
India's industrial production data for August and the HSBC manufacturing PMI reading will be released during the week, while market participants will closely monitor foreign institutional investor activity and upcoming monthly auto sales figures. Global bond yields will also remain important following the Federal Reserve's September policy decision, with further increases in yields potentially weighing on emerging-market capital flows.
The rupee is another key factor to watch, with persistent oil-related demand for dollars and continued FII outflows potentially keeping it under pressure. However, RBI intervention has helped contain excessive volatility, according to Ponmudi R, CEO of Enrich Money. The BSE benchmark Sensex declined 399.22 points, or 0.53 per cent, last week.