Oil Spike and Iran-US Row Set Stage for Volatile Week
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A combination of rising crude oil prices and renewed Iran-US tensions is expected to keep Indian equities on tenterhooks in the coming sessions. After a week in which Brent crude gained 7.84 percent and WTI surged 10.48 percent, investors are worried that further escalation could push energy costs higher and hurt corporate margins. Tehran’s plan to tighten control over the Strait of Hormuz and continued American pressure have reduced the likelihood of a quick diplomatic breakthrough. Foreign institutional investors have already expressed their discomfort by selling Rs 27,177 crore worth of Indian equities in May, taking the yearly tally to Rs 2,31,486 crore. Domestic economic data will also influence sentiment. HSBC PMI numbers arrive on 21 May, followed by banking and forex reserve data on 22 May. Last week’s market performance reflected these concerns, as Sensex shed 2,090 points or 2.70 percent to settle at 75,237 and Nifty lost 532 points or 2.20 percent to end at 23,643. Realty, IT, consumer durables, and auto stocks bore the brunt of selling, while pharma and healthcare sectors proved more defensive. Experts caution that unless oil prices ease or geopolitical risks subside, volatility is likely to remain elevated.
