Stock market outlook: What investors should watch out for

Indian equity indexes are expected to remain volatile during the next week, as investors keep a close watch on the global market sentiment, crude oil prices, and geopolitical developments.

Concerns over the prolonged US-Iran conflict and spike in crude oil prices continued to drive investors away from more volatile assets. Besides, heavy selling in global markets, constant foreign fund outflows, and failing in the rupee also hurt investors' sentiment, reported agencies.

On Friday, Sensex declined 1470.50 points or 1.93 percent to end at 74,563.92. While the Nifty plunged 489.05 points or 2.06 percent to settle at 23,151.10.

While speaking with The Tribune, Nitin Rao, CEO, InCred Wealth, said the markets have been impacted by geopolitical factors revolving around the conflict in the Middle East. This was an unforeseen event, and contrary to expectations, it has been a prolonged event with no signs of closure. The event has caused confusion in the Middle East economies, with energy infrastructure now being impacted.

He said India was already grappling with its growth slowdown and AI impact on Indian IT, and this conflict has created additional pressure on the key economic impacter oil. The market corrections are therefore not surprising, and depending on how the conflict plays out, there is room for more correction.

While relative valuations vis-à-vis emerging markets are still costly, India’s long-term growth story factors have not changed, though sectors and opportunities may now differ, he further said.

“Staggered investing would be the right way to invest in markets with a larger focus on large caps rather than mid/small caps in the short term. Longer-term agile investors could also get sudden opportunities on sharp falls to take aggressive long-term exposures for extraordinary returns, especially in small and midcap stocks,” Rao added.