What to Expect This Week: Stock Market Reactions to US-Iran Tensions and Earnings Reports
Market Outlook Amid Geopolitical Tensions
New Delhi: Analysts predict that stock markets will closely monitor the ongoing US-Iran conflict, fluctuations in crude oil prices, and the latest quarterly earnings from various corporations for guidance this week.
Additionally, the trading patterns of foreign investors are expected to significantly impact market dynamics.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, emphasized that geopolitical events surrounding the US-Iran situation will be crucial, as they directly affect crude oil prices and overall global risk sentiment.
The ceasefire agreement between the US and Iran is set to conclude on April 22.
On the domestic front, attention will shift towards the ongoing Q4 FY26 earnings season.
Market participants are likely to react to the financial results from major banking institutions like HDFC Bank and ICICI Bank, followed by announcements from other significant companies such as HCL Technologies, Infosys, Tech Mahindra, Havells, IndusInd Bank, and Shriram Finance.
Recently, HDFC Bank reported an 8.04% increase in its consolidated net profit for the March quarter, reaching Rs 20,350.76 crore, although it cautioned about potential risks from the West Asia conflict affecting small-business borrowers.
ICICI Bank also announced a 9.28% rise in its consolidated net profit to Rs 14,755 crore for the same quarter, aided by a substantial reduction in provisioning.
Santosh Meena, Head of Research at Swastika Investmart Ltd, noted that the upcoming week will be primarily driven by a wave of Q4 earnings reports, alongside a close watch on US macroeconomic data and ongoing geopolitical developments.
Last week, the BSE benchmark Sensex surged by 943.29 points, or 1.21%, while the NSE Nifty rose by 302.95 points, or 1.25%.
Investor focus will be directed towards the progress of US-Iran negotiations, with a greater emphasis on signs of a lasting resolution rather than immediate headlines, given the implications for global risk assets, capital flows, and crude oil prices.
Stability or further declines in crude prices could provide significant support for equities and enhance the broader macroeconomic outlook.
Following the US and Israel's attack on Iran on February 28, Tehran had largely suspended traffic through the Strait of Hormuz, a critical route for global oil supplies.
After Tehran announced on Friday that it had reopened the waterway for commercial traffic, several vessels attempted to navigate through it. However, Tehran stated on Saturday that it had once again closed the waterway, claiming that the US violated a prior agreement.