There was some selling pressure from foreign funds during the week, as Thursday and Friday saw net selling in the cash markets by them.

Tensions in Iraq weighed on the markets this week and it is likely that it would continued next week. The rupee also saw some losses as crude prices rose to their highest levels since Sept, 2013. Also, the WPI data that came in this week was a shocker with analysts not expecting a WPI inflation rate of 6.1 per cent for the month of May.

Crude, oil Iraq to take centrestage next week

Going into next week Iraq and crude prices are likely to take centre stage. The problem in Iraq is unlikely to go away in a hurry as there is virtually no foreign intervention in the country. This means that militants and the Iraqi army would continue a fight to control the country. Any damage to refinery and crude oil installations is likely to send crude oil prices soaring. This obviously means that equities across the globe including India are likely to fall. The problem for India though is that since we import as much as 70 per cent of crude oil, we are vulnerable to price shocks in crude oil.

Stay away from oil and gas stocks

It's best to stay away from oil and gas stocks in the wake of simmering tensions in Iraq. ONGC in particular has been seeing bouts of volatility through the week. Unless, things calm down in Iraq it may not be prudent to enter oil and gas stocks, particularly HPCL, BPCL and ONGC.

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