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• There is a possibility of major volatility in the stock market
• A direct result of US-Iran tensions
• Other influencing factors

Share Market Outlook: Rising tensions between the US and Iran, sustained selling by foreign investors, rupee depreciation and rising crude oil prices saw the Indian stock market fall last week. Therefore, there was a lot of tension in the market last week. The BSE Sensex fell by 2090.20 points or 2.7 percent. On the other hand, the condition of NSE Nifty was similar. It came down by 532.65 points, i.e. 2.2 percent. After this major drop in the market, investors are now focused on the upcoming week. The major question is whether the decline in Sensex and Nifty will continue or the market will recover.

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There is a possibility of major volatility in the stock market

According to market experts, the Indian stock market is currently facing pressure from several fronts. Geopolitical tensions, inflation concerns, a weakening rupee and a sell-off by foreign investors have shaken investor confidence. As a result, the stock market is likely to witness major volatility in the coming period.

A fall in the rupee will add to the concern

Last week, the Indian rupee fell to the level of 96 against the US dollar. This weakness in the rupee has added to the anxiety of investors. According to experts, how the rupee will move in the coming days will play a very important role in determining the direction of the market. If the rupee weakens, the cost of imports increases; As a result, companies are under pressure and inflation is likely to increase. If the rupee weakens further, selling by foreign investors may intensify and adversely affect the Indian market. The price of Brent crude oil rose sharply, reaching the level of 109 dollars per barrel. Rising oil prices have deepened inflationary concerns.

A direct result of US-Iran tensions

Religare Broking Ltd. Ajit Mishra, Senior Research, said that investors will remain focused on the US-Iran conflict and its potential impact on the global economy. He noted that fluctuations in crude oil prices, inflation levels and changes in global risk sentiment can have a direct impact on Indian markets. He further said that energy market and rupee volatility will determine the market trends in the near future.

All eyes on Hormuz

Meanwhile, CEO of Enrich Money, Ponmudy R observed that the market is witnessing high volatility. Every new development to the US-Iran conflict has the potential to influence investor sentiment. He said, “Global markets will closely monitor any developments to the ‘Strait of Hormuz’; as it is considered to be a very important route for the world’s energy supply. If there are any positive signals on the de-escalation of tensions at the diplomatic level, the markets may return to bullishness. Conversely, if tensions increase or oil supply disruptions, equity, currency and commodity markets may see major pressure.”

Other influencing factors

Santosh Meena, head of research at Swastika Investmart, noted that this week, investors’ attention will be focused not only on geopolitical developments, but also on economic data releases from China, the US and India. Additionally, the details of the ‘Federal Open Market Committee’ meeting could also be crucial in determining market direction.

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