Dalal Street Week Ahead: Key Factors to Watch Amid Geopolitical Tensions and Central Bank Meetings
Dalal Street heads into a cautious week amid Israel-Iran tensions, key central bank meetings, rising oil prices, and active IPOs shaping market moves.
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The market is set for a cautious week starting June 16, influenced by escalating Israel-Iran conflict, high valuations, and critical central bank meetings including the Federal Reserve (Fed), Bank of England (BoE), and Bank of Japan (BoJ). Experts also highlight monsoon progress as a factor impacting market sentiment.
Last week, Dalal Street erased gains, with the Nifty 50 dropping 284 points (1.14%) to 24,719 and the BSE Sensex falling 1,070 points (1.3%) to 81,119. Defensive sectors like IT and Pharma showed resilience, helped by a weaker rupee. Midcap and smallcap indices also saw declines.
Siddhartha Khemka, Head of Research at Motilal Oswal, expects subdued markets driven by weak global cues and sector-specific news. Vinod Nair of Geojit Investments also predicts a cautious outlook, with strong attention on the upcoming Fed meeting.
Top 10 Factors to Watch Next Week:
Israel-Iran Tension & Oil Prices:
Geopolitical tensions worsened with missile exchanges and military strikes on key sites, prompting cancellation of US-Iran nuclear talks. Brent crude futures surged over 11% last week, nearing $74. Experts warn prices may hit $80 if conflict escalates, raising inflation concerns for oil-importing India.
Federal Reserve Interest Rate Decision:
Fed’s policy meeting on June 18 is expected to keep rates steady at 4.5%, but commentary will be scrutinized amid trade tensions and inflation trends. The US administration pressures Fed to lower rates to avoid recession or stagflation.
Bank of Japan & Bank of England Meetings:
Both banks are likely to hold rates steady (BoJ at 0.5%, BoE at 4.25%) next week amid global uncertainties, especially US trade policies.
Global Economic Data:
Focus on US retail sales, industrial production, business inventories, weekly job reports, and inflation data from Europe, UK, Japan, and China.
Domestic Economic Data:
WPI inflation, passenger vehicle sales, balance of trade for May (June 16), and infrastructure output, monetary policy minutes, bank loan growth, and forex reserves due later in the week.
FII and Indian Rupee Movement:
Foreign Institutional Investors (FIIs) have continued selling, with net outflows last week, while Domestic Institutional Investors (DIIs) remain strong buyers. The rupee depreciated to 86.09 against the dollar.
IPO Activity:
Six IPOs, including mainboard Arisinfra Solutions (opening June 20), and five SME IPOs, will hit Dalal Street next week. Oswal Pumps and several SME shares will commence trading.
Technical Outlook:
Nifty remains range-bound between 24,450 and 25,200. A break below 24,450 could trigger a slide toward 24,000; above 25,000, resistance levels to watch are 25,200 and 25,450. The India VIX jumped 3.08% signaling caution.
F&O Cues:
Key support for Nifty lies at 24,000 and 24,500, with resistance near 25,000, 25,200, and 25,500 marks.
Corporate Developments:
Several key corporate actions and earnings announcements are expected to influence sentiment.
With geopolitical tensions and central bank meetings dominating headlines, investors are advised a cautious, wait-and-watch approach in the week ahead.
