The Indian stock market concluded a volatile week on a positive note, breaking a two-week losing streak as investor sentiment improved amid a favorable global backdrop and RBI measures to boost foreign currency inflows. The Nifty 50 rose 1.10% to 23,622.90, while the Sensex advanced 1.73% to finish at 75,527.95.
Investor sentiment was buoyed by optimism over a potential U.S.–Iran peace agreement, which raised expectations of reduced geopolitical risks and greater stability in energy markets. Additionally, the Reserve Bank of India introduced forex swap facilities for eligible external commercial borrowings (ECBs) and new FCNR(B) deposits, enhancing liquidity conditions and encouraging foreign currency inflows.
Ponmudi R, CEO at Enrich Money, noted that markets are likely to remain highly sensitive to developments surrounding the proposed US–Iran agreement in the coming week. Reports suggest substantial progress has been made, with a broad consensus emerging among key stakeholders.
“Markets are likely to remain highly sensitive to developments surrounding the proposed US–Iran agreement in the week ahead.”
Ponmudi R, CEO at Enrich Money
Crude oil prices remain a critical variable for market sentiment. Continued stability or further moderation in energy prices could reinforce the recent improvement in risk appetite by easing concerns around inflation, import costs, and India's broader macroeconomic outlook. Conversely, any setback in diplomatic efforts or renewed tensions in the Middle East could quickly revive volatility and trigger a renewed increase in energy prices.
The US Federal Reserve's Federal Open Market Committee (FOMC) meeting is scheduled for June 16–17. Investors widely expect policymakers to leave interest rates unchanged, as indicated by CME Group’s FedWatch tool. This meeting will also mark the first announcement under the new Fed Chair, Kevin Warsh.
“The US Federal Reserve's policy decision will be the most significant event. Market participants will closely assess the Fed's commentary on inflation, growth, and the future trajectory of interest rates.”
Ajit Mishra, SVP, Research, Religare Broking
Background
The Indian stock market has been experiencing volatility due to geopolitical tensions and economic uncertainties. The recent positive developments in US-Iran relations and RBI's measures to enhance liquidity have provided a much-needed boost to investor confidence.
Looking ahead, investors will closely monitor the developments in the US-Iran peace talks and the outcomes of the US Federal Reserve meeting. These factors are expected to significantly influence market dynamics and investor sentiment in the coming weeks.
