Geopolitical talks and oil prices set to steer markets this week

Market participants expect US-Iran diplomatic developments and fluctuations in crude oil prices to shape investor sentiment worldwide during the shortened trading week. In India, upcoming releases of August industrial production numbers and the HSBC manufacturing PMI will provide domestic momentum cues, while foreign institutional investor activity and monthly auto sales data will be closely monitored. The rupee could stay under pressure due to continued oil-driven dollar demand and potential outflows, though RBI actions have helped limit volatility.

Global bond yields, influenced by the Federal Reserve's recent policy stance, may affect emerging-market fund flows, with higher yields weighing on risk appetite. Additionally, US economic releases, including consumer confidence and job-related data, will contribute to the overall risk outlook.