NEW DELHI: Stock markets are expected to be guided this week by the outcome of state elections and elevated crude oil prices amid the ongoing West Asia conflict, according to analysts. Investors will also track developments related to the West Asia conflict and the Strait of Hormuz.
State Elections in Focus
Counting of votes for the five assembly elections in West Bengal, Tamil Nadu, Kerala, Assam, and Puducherry will begin on Monday, May 4. Hariprasad K, research analyst and founder of Livelong Wealth, stated: “The most immediate catalyst will be the outcome of key state elections, with investors closely watching whether the ruling party at the Centre can wrest West Bengal from Trinamool Congress and make meaningful inroads into Opposition-ruled Kerala and Tamil Nadu, where the Bharatiya Janata Party (BJP) currently has a limited presence.”
Crude Oil Prices a Key Concern
Crude oil remains the single most critical macro variable, Hariprasad added. “With brent prices sustaining elevated levels amid ongoing tensions around the Strait of Hormuz, inflation risks remain pronounced. For an import-dependent economy like India, persistently high crude prices exert pressure on the rupee—currently near record lows—and weigh on corporate margins as well as fiscal dynamics,” he said.
Ajit Mishra, SVP of research at Religare Broking, noted: “Crude oil price trends will remain the primary external variable, with the ongoing US-Iran standoff and closure of the Strait of Hormuz likely to keep volatility elevated.”
Macroeconomic Data and Earnings
Key macroeconomic data releases include the HSBC Manufacturing PMI on May 4, Services and Composite PMI on May 6, and foreign exchange reserves data on May 8, which will provide insights into economic momentum and external sector stability, Mishra added. Major corporate earnings announcements this week include Ambuja Cements, Bhel, Hero MotoCorp, Mahindra & Mahindra, and Bajaj Auto.
Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said: “Markets in the week ahead are likely to remain volatile and heavily news-driven.” Analysts also highlighted that foreign investor trading activity and Q4 earnings will influence market trends.
