After snapping a two-week winning run, Indian equities are likely to remain sensitive to geopolitical developments, with the Strait of Hormuz, US-Iran standoff and crude oil prices expected to influence trading activity this week.According to analysts, with the quarterly earnings season now behind investors, they are focusing on global monetary policy and foreign investor flows.“Developments surrounding the Strait of Hormuz and the trajectory of Brent crude will remain critical market drivers in the near term. With the earnings season behind us, the coming week will be relatively data-light, with investors likely to focus on global monetary policy expectations, crude oil prices and geopolitical developments,” Ajit Mishra – SVP, research, Religare Broking Ltd, said.A key event for global markets will be the release of the minutes of the US Federal Open Market Committee’s July meeting. The minutes are due on August 19 and will be watched for indications on the Federal Reserve’s policy outlook.Globally, a signal of a more hawkish Fed stance could put pressure on emerging-market flows and increase volatility in Indian equities, Mishra told PTI.“Investor attention in the coming week is likely to remain firmly focused on developments surrounding the Strait of Hormuz and the broader US–Iran standoff. Investor focus will also turn to the release of the minutes from the Federal Reserve’s July policy meeting on August 19,” Ponmudi R, CEO – Enrich Money, said.Ponmudi also said foreign institutional flows would be another area of focus for investors.The heightened focus on crude and geopolitical developments comes after Dalal Street ended lower last week. BSE benchmark Sensex shed 489.92 points, or 0.62%, while NSE Nifty lost 204.65 points, or 0.83%.The decline ended a two-week winning streak for Indian equity markets, with rising crude oil prices and renewed geopolitical tensions weighing on sentiment, Ponmudi said.Pabitro Mukherjee, deputy vice president-research, Bajaj Broking, said investors would track crude oil price movements along with developments in the ongoing US-Iran geopolitical tensions.Besides these factors, Chinese economic data will also be watched for cues on global growth, while the FOMC minutes could offer direction on the Fed’s policy outlook, Vinod Nair, head of research, Geojit Investments Limited, said.Investors, therefore, head into a relatively data-light week with crude oil, geopolitical developments, foreign flows and signals from the US central bank among the key factors expected to guide trading activity.
