State poll verdicts, crude oil and earnings seen steering Indian markets this week, say analysts
Indian equities are expected to take their cues this week from the outcome of key state elections and still-elevated crude oil prices amid tensions in West Asia, according to analysts. Investors will also watch developments around the Strait of Hormuz and their impact on energy markets.
Counting of votes for the 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, said the most immediate catalyst will be the state poll verdicts, with market participants eyeing whether the ruling party at the Centre can wrest West Bengal from the Trinamool Congress and make inroads into opposition-ruled Kerala and Tamil Nadu, where the Bharatiya Janata Party currently has a limited presence.
Hariprasad added that crude oil remains the single most critical macro variable. With Brent sustaining elevated levels amid tensions around the Strait of Hormuz, he said inflation risks are pronounced for an import-dependent economy like India, with high crude exerting pressure on a rupee near record lows and weighing on corporate margins as well as fiscal dynamics.
Ajit Mishra, senior vice-president of research at Religare Broking, said crude price trends will remain the primary external driver, with the ongoing US–Iran standoff and closure of the Strait of Hormuz likely to keep volatility elevated.
He added that upcoming macro releases—the HSBC Manufacturing PMI on May 4, Services and Composite PMI on May 6, and foreign exchange reserves data on May 8—will offer cues on economic momentum and external stability. Earnings will also be in focus, with quarterly results due from Ambuja Cements, BHEL, Hero MotoCorp, Mahindra & Mahindra and Bajaj Auto.
Ponmudi R, CEO of Enrich Money, said markets are likely to stay volatile and heavily news-driven, with attention fixed on the evolving US–Iran dynamic—whether a ceasefire holds, progress in diplomatic talks, and any movement related to the Strait of Hormuz.
Santosh Meena, head of research at Swastika Investmart, said markets are expected to initially react to the election outcomes, particularly in West Bengal, which could trigger one to two days of volatility. He noted crude has cooled slightly after surging towards USD 120 per barrel but warned that any fresh spike could spur renewed selling in equities, while a sustained decline would likely improve sentiment.
With the Q4 earnings season in full swing, he added, stock- and sector-specific moves will continue, while foreign portfolio flows and rupee movements remain key variables. In the holiday-shortened previous week, the BSE Sensex rose 249.29 points, or 0.32 per cent, and the NSE Nifty advanced 99.6 points, or 0.41 per cent.