Trump turns up the heat on Warsh as Fed rate hike looms

On Monday, the Indian stock market will be closely watching the performance of the Nifty and Sensex amid a variety of economic factors. The recent gains in these indices were erased by the end of Friday, with the Sensex closing near intra-day lows and the Nifty 50 below key support levels. Broader markets also showed mixed results, with midcap and smallcap indices struggling.

The driving forces behind the market's mood next Monday include rising oil prices, which have pushed crude prices to $86 a barrel, up 8% this week due to tensions between the US and Iran. This could lead to supply disruptions in the Strait of Hormuz. Additionally, bond yields have surged to multi-year highs, prompting foreign investors to shift towards US fixed-income assets due to higher returns and lower risk.

The US jobs report also fuelled speculation about a potential September interest rate hike, with Federal Reserve Chair Kevin Warsh considering the move.

Market analysts predict that a break below 23,700 could trigger a correction towards 23,500 and 23,300, while a move above 24,150-24,200 could stabilize the market. The technical indicators suggest bearish pressure on Nifty, with the daily RSI at 40 and the ADX rising, but the crucial support zone at 23,750-23,700 will determine the market's trajectory.