Indian equity benchmarks ended the holiday-shortened week with modest gains, demonstrating resilience amid global volatility and mixed domestic cues. The benchmark indices advanced in three out of four trading sessions, supported by easing crude oil prices, improving geopolitical developments in West Asia, and renewed foreign institutional investor (FII) buying. The week began on a strong note as lower energy prices and fresh FII inflows boosted risk appetite. However, markets witnessed a sharp correction on Tuesday due to weak global cues, profit booking after the recent rally, and temporary foreign fund outflows. Sentiment improved subsequently as benchmark indices rebounded sharply on the back of renewed institutional buying, hopes of an India-US trade agreement, and easing concerns over further interest rate hikes globally. The Nifty successfully reclaimed and sustained above the psychologically importanast 24,000 mark, reflecting underlying market strength. For last week, Sensex rose 297.57 points or 0.39% to close at 77,100.47, while the Nifty 50 gained 42.90 points or 0.18% to settle at 24,056. Broader markets underperformed, with the Midcap and Smallcap indices declining 0.76% and 0.16%, respectively, indicating selective participation. Technically, Nifty support is placed in the 23,800–23,300 zone, while resistance is seen around 24,300–24,600.
Global equity markets witnessed heightened volatility during the week amid shifting expectations regarding US monetary policy, continued geopolitical uncertainties in the Middle East, and a sharp rotation out of technology stocks. In the United States, investors reduced exposure to high-growth AI and semiconductor stocks amid valuation concerns and expectations of tighter monetary policy. Consequently, the Nasdaq Composite declined 4.6% during the week to close at 25,297.62, while the S&P 500 fell nearly 2% to 7,354.02. In contrast, the Dow Jones Industrial Average outperformed, rising 0.6% to settle at 51,876.11, supported by gains in defensive sectors such as healthcare, consumer staples, utilities, and financials. Asian markets also remained under pressure, with South Korea's Kospi plunging 5.81% on Friday amid the global technology sell-off. Nevertheless, strong earnings and optimistic guidance from major semiconductor companies later in the week helped improve sentiment, preventing a deeper correction. Overall, global markets remained sensitive to developments in crude oil prices, geopolitical tensions, and evolving expectations around US Federal Reserve policy.
Geopolitical developments in West Asia remained a key market driver during the week. Although the ceasefire agreement between the US and Iran remained largely intact, concerns resurfaced following reports of drone attacks in the Strait of Hormuz and an attack on a cargo vessel near Oman. The United States accused Iran of violating the ceasefire agreement, while disagreements continued regarding the utilization of Iranian assets covered under the recently signed memorandum of understanding. Uncertainty surrounding the implementation of the agreement and the security situation in the Strait of Hormuz kept investors cautious. Nevertheless, the resumption of tanker movements through the strategic waterway helped alleviate immediate concerns regarding global energy supplies.
Crude oil prices continued to trend lower during the week as concerns over supply disruptions eased following the resumption of shipping activity through the Strait of Hormuz. Brent crude and WTI prices declined towards pre-conflict levels, with WTI slipping below the USD 70 per barrel mark during the week. Lower crude prices provided significant relief to India by reducing imported inflation risks, easing pressure on the current account deficit, and improving the outlook for energy-intensive sectors. Going forward, the trajectory of crude oil prices will remain a critical factor influencing inflation expectations, monetary policy, and overall market sentiment.
Domestic macroeconomic indicators presented a mixed picture. India's foreign exchange reserves declined by nearly USD 10 billion to USD 671.63 billion, primarily due to a sharp fall in gold reserves. Growth in India's eight core industries slowed sharply to 0.5% in May 2026, marking the second-lowest reading in 21 months, indicating moderation in industrial activity. Five out of eight core sectors contracted during the month, highlighting broad-based weakness. Additionally, June flash PMI readings showed moderation across manufacturing, services, and composite indices, although all remained firmly in expansion territory. Manufacturing PMI eased to 54.5, Services PMI moderated to 57.3, and Composite PMI declined to 57.4, suggesting softer but still healthy economic activity. Despite moderation, the Indian economy continues to exhibit resilience supported by robust domestic demand and a strong services sector.
Markets are expected to remain range-bound with a positive bias, supported by easing crude oil prices and improving geopolitical developments. However, sustained FII participation and global risk sentiment will remain critical for extending the current rally. Technically, the Nifty support is placed around 23,800–23,300, while resistance is seen between 24,300–24,600. A sustained move above 24,600 could trigger fresh upside momentum. Investors will closely monitor India's Industrial Production (IIP) data, fiscal deficit figures, final PMI readings, and forex reserve data for cues on domestic economic momentum. Globally, attention will be focused on China's manufacturing PMI data, US ISM Manufacturing PMI, JOLTS job openings, Non-Farm Payrolls, and unemployment data, which could influence expectations regarding the US Federal Reserve's future policy path. Corporate commentary on demand trends and margin outlook will also remain important. However, the moderation in industrial activity and PMI readings suggests that investors should remain selective and focus on fundamentally strong sectors. Investors are advised to maintain a balanced approach and closely monitor global developments while focusing on quality businesses with strong earnings visibility.