The Indian stock market’s trajectory in the upcoming week is expected to be influenced by global factors. Investors will keenly observe the US Federal Reserve’s policy meeting, developments related to a potential US-Iran peace agreement, and trends in crude oil prices. Following a positive end to the previous week, benchmark indices showed gains, with the Nifty rising by 1.10% to close at 23,622.90 and the Sensex climbing 1.73% to settle at 75,527.95.
Global markets will closely watch the US Federal Reserve’s Federal Open Market Committee (FOMC) meeting scheduled for June 16-17. While interest rates are anticipated to remain steady, investors will pay close attention to the central bank’s stance on inflation, economic growth, and future rate adjustments. Any hints regarding potential rate cuts could impact foreign fund flows into emerging markets like India.
Investors will also monitor geopolitical developments in West Asia, particularly surrounding a possible peace agreement between the US and Iran. The announcement by US President Donald Trump regarding a peace deal scheduled for June 14 has boosted market sentiment. The reopening of the crucial Strait of Hormuz, a vital route for global oil shipments, is expected to alleviate concerns over supply disruptions, potentially boosting risk appetite in global equity markets.
Furthermore, the movement of crude oil prices will play a significant role in influencing domestic equities. Recent declines in oil prices, attributed to expectations of increased crude shipments through the Strait of Hormuz and optimism regarding a temporary peace deal, could impact India’s inflation outlook and import bill. Additionally, the Reserve Bank of India’s recent measures to promote foreign currency inflows, such as introducing forex swap facilities for eligible external commercial borrowings (ECBs) and fresh FCNR(B) deposits, are expected to enhance liquidity conditions and bolster market sentiment.
