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Dalal Street anticipates a busy week driven by the RBI's interest rate decision, key economic data, and global developments like the US-Iran situation and crude oil prices. Investors will closely track manufacturing and services PMI, GDP growth, and foreign exchange reserves for market direction.

Short-term global economic shocks, like the ongoing Middle East conflict, have the potential to temporarily slow the growth story - a fact that cannot be ignored if India hopes to be among the top three world economies in the coming years.

Canada's economy unexpectedly contracted by 0.1% in the first quarter, marking two consecutive quarters of decline and sparking debate over a technical recession. Prolonged U.S. tariff uncertainty and geopolitical headwinds have impacted business investment and driven up domestic prices, though some economists dispute the recession label due to a lack of widespread weakness.

India's economic horizon is looking promising, with the Reserve Bank of India forecasting a robust 6.9% GDP growth for the fiscal year 2026-27. Yet, challenges loom as global tensions, particularly in West Asia, and escalating energy costs could disrupt this trajectory. Inflation is predicted to rise slightly to 4.6%, while the RBI targets a steady 4%.

Acknowledging the impact of the West Asia crisis, the RBI has said that several factors will help India counter the negative effects and emerge strong.

The rupee weakened by 34 paise to 95.19 against the US dollar on Monday, impacted by escalating US-Iran tensions, soaring crude oil prices, and a stronger dollar. Global risk sentiment soured due to West Asia concerns. Analysts anticipate continued negative bias for the rupee, with a trading range of 94.60-95.30.

US Defense Secretary Pete Hegseth took another swipe at Washington's NATO and European partners on Saturday, saying those that do not hike defence spending sufficiently "will face a clear shift in how we do business". "Allies who refuse to step up and carry their own weight for our collective defence will face a clear shift in how we do business."

Despite near-term volatility, India's appeal remains strong for strategic investors due to its scale and growth prospects. While foreign institutional investor participation has declined, Bank of America's India CEO Vikram Sahu believes capital will follow as regulatory friction eases and business conditions improve. Investor sentiment is showing signs of recovery, with a growing willingness to explore current market entry points.

Persian Gulf tensions pushed crude prices near $100, weakening the rupee and causing the Sensex to plunge over 1,100 points mid-session. Despite initial losses, banking stocks rallied, aiding a partial recovery, while IT stocks crashed due to AI disruption fears. Foreign funds saw significant outflows.

Elon Musk's fortune has surged to $970 billion, with a potential SpaceX IPO poised to make him the world's first trillionaire. His wealth, primarily from SpaceX and Tesla holdings, allows for vast hypothetical purchases, exceeding the GDP of many nations. This immense accumulation is attributed to his intense work ethic.

The US is making a massive investment in autonomous warfare, requesting $54.6 billion for its new Defence Autonomous Warfare Group (DAWG). This initiative aims to counter the growing threat of drone swarms, as seen in conflicts like Ukraine and the US-Iran tensions. The focus is shifting towards affordability and mass production to maintain a credible defence.

For fuel, price hikes will do the job. For rupee, a hike in interest rates, one-time dollar bonds issue for NRIs & capital gains tax rejig will do the trick. Remember, our macros are just fine

The US is bolstering its presence in Poland with an additional 5,000 troops, recognizing Warsaw's escalating importance in regional security. Poland, already hosting 10,000 American soldiers, is rapidly militarizing, investing heavily in advanced weaponry from the US and South Korea.

Despite its age, COBOL remains the critical backbone of the global financial system, handling trillions daily. As its original developers retire, a severe shortage of skilled programmers has emerged, leading to astronomical salaries for those who can maintain the ancient code. Young developers are now capitalizing on this scarcity, while institutions explore AI solutions to bridge the gap.