Market Gains Amid Middle East Tensions and Key Economic Reports

Mumbai, India — The stock market made a significant recovery last week, closing 1.59 percent higher by June 20, as investors responded to global events and economic indicators. The Nifty 50 ended at 25,112, gaining 394 points, and the BSE Sensex surged 1,290 points to reach 82,408. This rebound came despite escalating tensions in the Middle East and rising crude oil prices.

The United States’ decision to delay intervention in the Iran-Israel conflict helped ease investor fears. The Reserve Bank of India’s dovish stance, including relaxed project financing norms, also contributed positively to market sentiment. However, experts warn that the market may face volatility in the coming weeks as the U.S. has started targeting Iranian nuclear facilities.

“Geopolitical uncertainty continues to loom,” said Vinod Nair, Head of Research at Geojit Investment. He noted that investors should focus on the upcoming U.S. GDP growth figures and India’s PMI data to gauge economic recovery trends.

This week, markets will closely monitor the repercussions of U.S. military action in the Middle East, particularly its effects on oil prices. The U.S. struck three Iranian nuclear sites, attracting concern that Iran could retaliate by disrupting oil flows through the Strait of Hormuz, a critical global shipping route.

Brent crude oil futures closed at $77.01 per barrel, up 3.75 percent last week. In contrast, gold prices dipped to $3,385.7 per troy ounce.

Additionally, all eyes will be on Federal Reserve Chair Jerome Powell’s testimony on June 24-25, where he will address Congress on the economy. The Fed’s current GDP growth forecast is 1.4 percent for 2025, down from earlier estimates. The bank is still cautious about inflation amid labor market tightness.

On June 26, the final numbers for U.S. GDP growth for the first quarter will be released, alongside quarterly PCE prices and consumer spending data. Investors are also watching for monthly home sales and durable goods orders, which could indicate overall economic health.

In international news, the Standing Committee of China’s National People’s Congress will meet June 24-27 to discuss draft laws covering public health responses and competition, among other issues.

On the domestic front, the HSBC Manufacturing and Services PMI data for June will be released on June 23, following mixed reports in May. Foreign exchange reserves data will be revealed on June 27.

Market sentiment showed signs of foreign institutional investors being net buyers last week, as they purchased Rs 8,709.6 crore. However, domestic institutional investors outpaced them significantly, buying Rs 12,636 crore worth of shares.

This week will also see a surge in initial public offerings, with 13 companies expected to raise Rs 15,800 crore. The much-anticipated HDB Financial Services IPO will open for subscription on June 25, alongside other firms.

As the June futures and options contracts approach expiry, traders anticipate increased volatility, with support for the Nifty 50 projected between 24,800 and 24,700.