Indian equity markets ended the week on a strong note, snapping a two-week losing streak, supported by easing concerns around the Middle East conflict and proactive measures announced by the Reserve Bank of India (RBI) to attract foreign currency inflows. The RBI introduced special US Dollar-Rupee swap facilities for External Commercial Borrowings (ECBs) and FCNR(B) deposits, which significantly improved market sentiment by strengthening expectations of rupee stability and liquidity support. Despite a weak start to the week amid rising crude oil prices and geopolitical tensions, markets witnessed a sharp rebound on Friday following reports of progress toward a potential US-Iran peace agreement. BSE Sensex gained 1,284.61 points (1.73%) to close at 75,527.95, while the Nifty 50 advanced 256.20 points (1.10%) to settle at 23,622.90. However, broader markets remained subdued, indicating selective participation. Technically, the Nifty support is placed around 23,100–22,800, while resistance is seen in the 24,100–24,500 zone. Sustaining above 24,100 could open the door for further upside, while a break below 22,800 may trigger profit booking.
Global equity markets ended the week on a positive note as investors grew optimistic about a possible breakthrough in US-Iran peace negotiations and the reopening of the Strait of Hormuz. In the United States, the Dow Jones Industrial Average rose 0.7% during the week to close at 51,202.26, while the S&P 500 gained 0.6% to 7,431.46 and the Nasdaq Composite advanced 0.7% to 25,888.84. Investor sentiment was further supported by the successful IPO debut of SpaceX, which boosted risk appetite toward technology and AI-linked stocks. However, concerns over persistent inflation remained, with US headline CPI rising to 4.2% and PPI accelerating to 6.5%, reinforcing expectations that the Federal Reserve may maintain a restrictive policy stance for longer. In China, exports surged 19.4% year-on-year while producer inflation accelerated to 3.9%, highlighting resilience in manufacturing despite geopolitical uncertainties. Meanwhile, Japan’s economy expanded 0.5% in Q1 2026, supported by consumer spending and public investment.
Geopolitical developments remained the key driver of global financial markets. Reports suggested that the United States and Iran are close to finalizing a memorandum of understanding that could lead to the reopening of the Strait of Hormuz and gradual removal of sanctions on Iran. Pakistan continued to play a mediating role in negotiations. While both sides indicated that an agreement is near, conflicting statements from political leaders and concerns regarding implementation kept investors cautious. Nevertheless, the market interpreted the developments positively as the probability of a major supply disruption declined significantly. Any formal agreement in the coming days could provide substantial relief to global energy markets and improve overall investor sentiment.
Crude oil prices witnessed a sharp correction during the week as hopes of a US-Iran agreement reduced fears of prolonged supply disruptions. Brent crude declined 3.4% to settle at $87.33 per barrel, while WTI crude fell 3.2% to $84.88 per barrel. Despite the weekly decline, crude prices remain more than 20% above levels seen before the escalation of the Middle East conflict, keeping inflation risks elevated. For India, oil prices remain a crucial variable, as sustained levels above $85–90 per barrel could widen the trade deficit, pressure the rupee, and impact corporate margins across energy-intensive sectors.
India’s macroeconomic fundamentals remained relatively resilient despite external challenges.
Indian markets have staged a strong recovery supported by improving global sentiment, RBI's proactive liquidity measures, and optimism surrounding a potential de-escalation in Middle East tensions. However, the sustainability of the rally will depend on crude oil prices, inflation trends, geopolitical developments, and central bank commentary. While India's structural growth story remains intact, near-term volatility is likely to persist. Technically, the Nifty support is placed around the 23,100–22,800 zone, while resistance is seen between 24,100–24,500 levels. A decisive breakout on either side is likely to determine the next directional move for the market. Investors will closely monitor India's WPI inflation data (15 June), unemployment rate, trade deficit figures, RBI policy meeting minutes (19 June), and forex reserve data. Globally, key events include the US Federal Reserve policy decision, US retail sales, industrial production data, housing market indicators, and China's industrial production and retail sales numbers. The Fed's commentary on inflation and interest rates will be critical for global liquidity expectations. While easing crude oil prices and RBI measures provide near-term support, elevated inflation, geopolitical risks, and foreign fund flows will continue to influence market direction. Investors should continue focusing on fundamentally strong businesses, maintain a balanced allocation across sectors, and closely monitor developments in global markets.