Stock markets are likely to be guided this week by the outcome of state elections and high crude oil prices amid the West Asia conflict, say analysts.
The developments related to the West Asia conflict and the Strait of Hormuz will also be tracked by investors, they said.
Counting of votes for the five assembly elections in West Bengal, Tamil Nadu, Kerala, Assam, and Puducherry will begin on Monday, May 4.
"The most immediate catalyst will be the outcome of key state elections, with investors closely watching whether the ruling party at the Centre can wrest West Bengal from Trinamool Congress and make meaningful inroads into opposition-ruled Kerala and Tamil Nadu, where the Bharatiya Janata Party (BJP) currently has a limited presence," Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
Crude oil remains the single most critical macro variable, Hariprasad said.
"With Brent prices sustaining elevated levels amid ongoing tensions around the Strait of Hormuz, inflation risks remain pronounced. For an import-dependent economy like India, persistently high crude prices exert pressure on the rupee—currently near record lows—and weigh on corporate margins as well as fiscal dynamics," he added.
Macroeconomic data announcements, Q4 earnings, and foreign investor trading activity would also influence stock market trends this week.
"Crude oil price trends will remain the primary external variable, with the ongoing US–Iran standoff and closure of the Strait of Hormuz likely to keep volatility elevated," Ajit Mishra, SVP, Research, Religare Broking Ltd, said.
Key macroeconomic data releases include the HSBC Manufacturing PMI (May 4), Services and Composite PMI (May 6), and foreign exchange reserves data (May 8), which will provide insights into economic momentum and external sector stability, he added.
Major corporate earnings announcements this week are from Ambuja Cements, BHEL, Hero MotoCorp, Mahindra & Mahindra and Bajaj Auto.
"Markets in the week ahead are likely to remain volatile and heavily news-driven. Key attention will remain on the evolving US–Iran dynamic—particularly whether the ceasefire holds, the progress of diplomatic talks, and any developments related to the Strait of Hormuz," Ponmudi R, CEO - Enrich Money, an online trading and wealth tech firm, said.
Santosh Meena, Head of Research at Swastika Investmart Ltd, said, "This week, markets are expected to initially react to the outcome of state elections, particularly in West Bengal, which could trigger 1-2 days of volatility." He further said that the major focus, however, will remain on crude oil prices, which have cooled slightly after surging towards USD 120 per barrel.
"Any fresh surge in oil could exert renewed selling pressure on Indian equities, while a sustained decline would likely improve sentiment. Developments around US-Iran relations will be a critical driver of crude volatility. With the Q4 earnings season in full swing, stock and sector-specific movements are likely to continue. FII flows and rupee movements will also remain key factors to watch," Meena added.
In a holiday-shortened last week, the BSE benchmark Sensex climbed 249.29 points or 0.32 per cent, and the NSE Nifty went up by 99.6 points or 0.41 per cent.
Published on May 3, 2026