West Asia Conflict, Crude Oil Prices, US Inflation Data to Steer Stock Market

Developments in West Asia's conflict, crude oil prices, and US inflation data will be key drivers for the stock market next week, according to analysts.

Ajit Mishra of Religare Broking Ltd said that this week will remain highly sensitive to global monetary policy, crude oil prices, and geopolitical developments. Investors will closely monitor the impact of stronger-than-expected US employment data on expectations regarding the Federal Reserve's September policy decision.

The Strait of Hormuz situation will also be a critical monitorable, given its implications for India's inflation, external balance, and corporate profitability. Brent crude gained over 8% during the week, while WTI crude rose more than 9%, as renewed US-Iran hostilities increased the geopolitical risk premium in global energy markets.

The latest US jobs data pointed to resilient underlying economic momentum, but attention now shifts to upcoming US inflation data, which could shape expectations for Federal Reserve policy and global market sentiment. Treasury yields and interest-rate expectations will remain closely intertwined with the inflation narrative.