Will Indian stock market extend gains on Monday?
What's the story
The Indian stock market is expected to continue its upward trend coming Monday, following a nearly 3% gain last week. The gains were made despite global market volatility. Analysts say the direction of the market will be determined by several factors including the outcome of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting, oil prices, and foreign institutional investment trends.
Policy impact
RBI's MPC meeting outcome on August 5
The RBI is likely to announce the outcome of its MPC meeting on August 5.
Although it is expected to keep the repo rate unchanged at 5.25%, analysts expect a cautious approach amid inflation, growth, and global uncertainties.
The central bank's future policy guidance will be closely monitored for its views on inflation risks, liquidity conditions, and external factors.
Market concerns
Geopolitical tensions and oil prices impact
Geopolitical tensions in the Middle East, particularly between Iran and the US, are another factor influencing market movement.
Iran has been targeting vessels trying to pass through the Strait of Hormuz without its permission amid its conflict with the US.
Meanwhile, rising oil prices due to global crude flow concerns could trigger inflationary fears among investors.
Investment patterns
Foreign institutional investment trends
Foreign investors have been net buyers of Indian equities for three consecutive sessions, after a five-day selling streak.
Notably, there has been an increase in FPI allocation to mid and small-cap stocks due to their high growth potential.
This trend is being closely monitored as it could significantly impact market movement in the coming week.
Market influences
Corporate earnings and tech stock recovery
The recovery of tech stocks after strong earnings from Microsoft and Amazon could also impact the Indian market.
Additionally, 573 companies are set to announce their Q1 FY27 earnings next week, including major players such as SBI, Nykaa, Bharti Airtel, and Titan.
These corporate results will provide key trading cues for investors in the coming days.