Dalal Street Week Ahead: Israel-Iran Conflict, US Fed Meeting Among Key Market Triggers

Dalal Street Week Ahead: Geopolitical Tensions, Crude Oil Price Movements, and US Federal Reserve Policy to Drive Volatility on Indian Stock Markets

Mumbai, June 15, 2025 — The Indian stock market is gearing up for a volatile week, with multiple global and domestic factors expected to influence investor sentiment. Geopolitical tensions, particularly the ongoing Israel-Iran conflict, the upcoming US Federal Reserve meeting, and fluctuations in crude oil prices are among the key triggers that will shape market movements. Last week, both the Nifty 50 and Sensex experienced declines, as global uncertainty and foreign capital outflows weighed on investor sentiment.

Market Performance Last Week

Both the Nifty 50 and Sensex closed the week in the red, reflecting the heightened global uncertainty and capital flight from Indian equities.

• The Nifty 50 ended the week at 24,718.60, down 1.14%.
• The Sensex saw a steeper decline of 1.30%, impacted by heavy losses in large-cap stocks like HDFC Bank, Reliance Industries, ITC, ICICI Bank, and SBI.
• The BSE Midcap index dropped 0.90%, while the BSE Smallcap index experienced a marginal dip of 0.13%.

Five Key Market Triggers: Dalal Street Week Ahead

1. Israel-Iran Conflict

The geopolitical tension between Israel and Iran has escalated, with Israel launching strikes on Iran’s nuclear sites in retaliation for missile attacks. The conflict is now spilling over into the broader region, with the US military actively intercepting Iranian missiles. This raises concerns about a broader military confrontation in the Middle East, which could affect global stability and influence investor sentiment.

Moreover, the UK has moved military assets to the region, signalling increased global involvement. As a result, global oil prices have surged, adding to market volatility, and investors are closely monitoring any developments that could further disrupt the region’s geopolitical landscape.

2. US Federal Reserve Meeting (June 17-18)

The US Federal Reserve is set to hold its next policy meeting from June 17-18. While the Fed is widely expected to keep interest rates unchanged, its commentary on future monetary policy will be crucial for market sentiment. May’s inflation data showed a modest increase, leading many to expect two rate cuts in 2025. Market watchers will be looking for any signals on the Fed’s future stance on interest rates, especially in light of the ongoing economic recovery and inflation trends.

3. Crude Oil Prices and Dalal Street week ahead

The price of Brent crude oil surged by 7% on Friday, closing at $74.23 per barrel, reflecting concerns over the geopolitical turmoil in the Middle East. Higher oil prices could weigh heavily on India’s trade deficit, which could, in turn, impact corporate profitability, particularly in sectors that rely on oil for production. If oil prices remain elevated, it could also further weaken the Indian rupee, adding pressure on India’s external debt and inflation rates.

4. Foreign Portfolio Investors (FPIs)

Foreign Portfolio Investors (FPIs) have been net sellers in Indian equities, with ₹4,812 crore worth of shares sold in June, primarily due to concerns over geopolitical risks and a weakening rupee. Continued outflows from FPIs could put further pressure on the Indian stock markets, particularly in light of the ongoing global uncertainties. FPI sentiment will be a critical factor in determining the Dalal Street Week Ahead.

5. Dalal Street week ahead- Macroeconomic Data

India will release key macroeconomic data this week, including May Wholesale Price Index (WPI) inflation and trade balance data on June 16. The data will provide insight into inflationary pressures and the state of India’s external trade. Additionally, Eurozone CPI data and US jobless claims will be released on June 18, which could influence global market sentiment and the Dalal Street Week Ahead.

Market Outlook- Dalal Street week ahead

With a combination of geopolitical tensions, key economic data releases, and the potential for US monetary policy changes, investors are expected to remain cautious in the week ahead. The volatility in global markets and the uncertain outlook for crude oil prices will likely keep traders on edge, as the market braces for potentially significant market movements.

The domestic equity market could see short-term fluctuations, but long-term investors will likely remain focused on India’s strong growth fundamentals, despite the global headwinds.

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