Market outlook next week: Fed Chair speech, US-Iran tensions and crude oil in focus

Mumbai, Aug 23 (IANS) Indian benchmark indices are likely to remain volatile next week as investors track the first keynote address by US Federal Reserve Chairman Kevin Warsh, developments in the US-Iran conflict and negotiations, and movements in crude oil prices.

Rising US bond yields, persistent inflation concerns and global geopolitical uncertainty could continue to influence investor sentiment after the domestic market ended its second consecutive week in the red.

The Sensex ended Friday, August 21, largely unchanged, gaining just 3 points to close at 77,540.83, while the Nifty rose 20 points, or 0.08 per cent, to finish at 24,252. Broader markets also ended higher, with the Nifty Midcap 150 advancing 0.08 per cent and the Nifty Smallcap 250 gaining 0.41 per cent.

Despite Friday’s marginal gains, both key indices posted weekly losses. The Nifty declined around 0.47 per cent during the week, while the Sensex slipped nearly 0.60 per cent.

A key trigger for markets next week will be Federal Reserve Chairman Kevin Warsh’s much-awaited keynote speech at the annual Jackson Hole Economic Policy Symposium in Wyoming on August 28.

Geopolitical developments surrounding the US and Iran will also remain under close watch. Iran has criticised Washington’s plans to impose new sanctions, warning that the measures could further weaken its economy and affect key trading partners, including China. Although hostilities have largely eased since the US and Israel launched airstrikes on Iran on February 28, there has been limited clarity on a durable path towards peace negotiations. Any fresh escalation could trigger risk aversion across global markets.

Crude oil prices are another major factor that could dictate the direction of Indian equities. Oil futures ended higher on Friday after US President Donald Trump threatened economic sanctions against countries trading with Iran, raising concerns over possible disruptions to global crude supplies. For India, which remains heavily dependent on imported crude, sustained high oil prices could put pressure on inflation, the rupee, corporate margins and the country’s current account.

–IANS

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