Indian equity benchmarks ended the week marginally lower, snapping their four-week winning streak amid renewed geopolitical tensions in the Middle East and a sharp rise in crude oil prices. Markets started the week on a positive note, supported by encouraging Q1FY27 business updates, easing crude prices, healthy monsoon progress, and improving risk appetite. However, sentiment deteriorated sharply mid-week after renewed US-Iran tensions triggered a spike in oil prices, prompting broad-based profit booking across sectors. Despite the sharp correction, benchmark indices staged a strong recovery during the last two sessions, aided by positive global cues and robust Q1FY27 earnings from TCS. Broader markets continued to outperform the frontline indices, reflecting sustained buying interest in mid- and small-cap stocks. During the week ended, the Sensex declined 194.52 points (0.25%) to close at 77,569.39, while the Nifty 50 fell 63.95 points (0.26%) to settle at 24,206.90. The BSE Midcap Index gained 1.33% and the Smallcap Index advanced 0.47%, highlighting continued strength in broader market participation. Technically, Nifty support is placed at 23,800–23,600, while immediate resistance is seen around 24,600–24,750.
Global equity markets remained volatile during the week as investors balanced optimism surrounding artificial intelligence-led earnings with renewed geopolitical risks in the Middle East. In the United States, technology heavyweights such as Nvidia and Meta supported gains in the broader market despite continued weakness in semiconductor stocks. For the week, the S&P 500 advanced over 1% to close at 7,575.39, while the Nasdaq Composite also gained more than 1% to end at 26,281.61, driven by continued enthusiasm around AI-related investments. In contrast, the Dow Jones Industrial Average declined 0.5% on a weekly basis to close at 52,637.01, reflecting sectoral rotation into defensive segments. European markets remained broadly stable, supported by improving retail activity despite persistent producer inflation. Asian markets delivered mixed performance, with South Korea and Japan outperforming, while Chinese equities remained under pressure following softer inflation data. Overall, investors continued to monitor the evolving US-Iran conflict, global inflation trends, and expectations surrounding future Federal Reserve policy decisions.
Geopolitical tensions intensified again during the week after Iran launched attacks on US military infrastructure in Gulf states in response to American strikes on Iranian positions. The renewed conflict further weakened the already fragile ceasefire agreement and significantly disrupted shipping activity through the Strait of Hormuz. Although both countries agreed to continue diplomatic discussions, uncertainty surrounding future negotiations continued to keep investors cautious. Any further escalation remains a key risk for global energy markets and financial assets.
Crude oil prices remained highly volatile as geopolitical tensions escalated across the Middle East. Although Brent crude settled lower at around USD 76 per barrel and WTI near USD 71 per barrel on Friday, both benchmarks recorded solid weekly gains of nearly 5% and 4%, respectively. Continued disruption in shipping through the Strait of Hormuz has maintained a significant geopolitical risk premium in oil prices. Sustained higher crude prices could increase imported inflation, widen India's current account deficit, pressure corporate margins, and delay expectations of monetary easing.
India's macroeconomic outlook remained broadly resilient despite emerging external headwinds. The IMF projected India's GDP growth at 6.4% in FY27 and 6.7% in FY28, reaffirming India's position among the world's fastest-growing major economies. RBI data showed NBFC credit growth accelerated to 14.2% in May, led by robust retail lending and agricultural credit, indicating healthy domestic credit demand. Meanwhile, India strengthened strategic economic cooperation with Indonesia through agreements covering trade, investment, critical minerals, manufacturing, digital economy, and energy security. However, concerns have emerged over delayed kharif sowing following a weaker-than-normal monsoon, increasing the risk of food inflation and placing greater focus on the upcoming inflation data.
Markets are expected to remain volatile as investors closely monitor geopolitical developments, inflation data, and the progress of the Q1FY27 earnings season. Technically, Nifty is expected to trade within the 23,800–24,600 range, with sustained buying above 24,600 likely to trigger fresh upside, while 23,800 remains a key support level. Domestically, June CPI inflation, WPI inflation, unemployment rate, trade deficit, and foreign exchange reserves will provide important insights into the health of the economy and inflation trajectory. Globally, investors will track US CPI, PPI, retail sales, housing data, China's Q2 GDP, industrial production, retail sales, and trade data, along with developments in the ongoing US-Iran peace negotiations. Management commentary during the earnings season will be equally critical in assessing FY27 demand trends and margin outlook. While near-term volatility may persist, India's structural growth story and strong domestic fundamentals continue to support a constructive medium- to long-term investment outlook.