After a positive end to the holiday-shortened week, Dalal Street is set to monitor progress in the proposed India-US trade agreement, Middle East tensions, crude oil prices, and foreign investor activities in the upcoming week. Lower oil prices and improved risk sentiment led to modest gains in benchmark indices last week. The Sensex rose by 0.39% to close at 77,100.47, while the Nifty climbed 0.18% to settle at 24,056.
The market saw a significant boost as crude oil prices sharply declined, easing concerns over imported inflation, the current account deficit, and rising input costs for Indian firms. Investor confidence also rose with expectations of a trade deal between India and the US. Commerce and Industry Minister Piyush Goyal mentioned that both countries are nearing the conclusion of the trade agreement, seen as a crucial step to enhance economic ties and trade flows.
Geopolitical tensions in West Asia remained a focus for investors as the US conducted strikes on Iran following a drone attack in the Strait of Hormuz. Crude oil prices fell over 3% on Friday, heading towards significant weekly losses due to reduced supply disruption fears. The movement of oil tankers through the Strait of Hormuz eased market concerns, lessening worries of a major supply shock.
The Indian rupee strengthened during the week, supported by lower crude oil prices and positive signs in foreign portfolio investments. However, investors remained watchful of potential interest rate changes by the US Federal Reserve, which could impact global capital flows.
