- Iran situation
How are the Indian and global economic environments affecting the financial markets?
The geopolitical tensions in the Strait of Hormuz, as we had expected would happen for quite some time, are ratcheting up the oil price. However, the slowing global economy is putting a lid on oil demand and we do not expect concerns in India about fuel prices and any attendant inflation until oil rises secularly and hits $80/barrel. At the moment, slowing Indian GDP can become a concern especially for foreign portfolio investors and if they continue to take money out of equities it could pressure the markets.
What to expect from the markets next week?
Corporate earnings results and global economic conditions will determine whether the Reserve Bank of India (RBI) will cut the repo rate again in August. A July rate cut by the US Federal Reserve could set off a rate cut by the RBI in India. Financial markets will react to corporate earnings and any new Information on China, Iran and the global economic front.