Crude Oil, US Inflation, and West Asia Tensions to Drive Dalal Street

India's stock market is expected to remain sensitive to global factors next week, analysts predict. The key drivers of sentiment will be developments in the West Asia conflict, crude oil prices, and upcoming US inflation data. Foreign investor activity and global market trends are also likely to influence domestic equities.

Ajit Mishra, SVP of Research at Religare Broking Ltd., notes that investors will closely monitor the impact of stronger-than-expected US employment data on expectations regarding the Federal Reserve's September policy decision. He adds that domestic liquidity conditions and foreign institutional flows will also be crucial to watch.

Brent crude prices rose over 8% during the week, while WTI crude climbed more than 9%, as renewed US-Iran hostilities pushed up the geopolitical risk premium in global energy markets. Analysts expect this trend to continue next week, with elevated oil prices likely to remain a persistent overhang on market sentiment.