Global Cues Set to Drive Indian Stock Market Next Week Amid Rising Oil Prices

The Indian stock market is expected to remain sensitive to global cues next week. Crude oil prices, rising bond yields, and stronger-than-expected US jobs data will likely drive investor sentiment.

Renewed tensions between the US and Iran, uncertainty over the Strait of Hormuz, and shifting expectations around US interest rates are expected to keep volatility elevated.

The benchmark indices ended higher on Friday but surrendered most of their gains after the closing auction session. The Sensex gained 363 points to close at 76,515, while the Nifty rose more than 24 points to finish below the 23,898 mark.

Oil prices have risen around 8 percent this week due to US and Iran's strikes and concerns over a supply disruption as the Strait of Hormuz remains shut. Citi has raised its average Brent crude price forecast for the third quarter to $86 a barrel from $80, citing expectations of a longer-than-anticipated timeline for the waterway's reopening.

The sharp rise in global bond yields is another concern. Markets are dealing with oil-driven inflation, tighter monetary policy expectations, and deteriorating fiscal conditions. The increase in crude prices and fuel costs has pushed up inflationary pressures and government borrowing costs globally.