Dalal Street This Week: Iran-Israel conflict, US GDP, Fed Chair Powell Testimony, HDB Financial IPO among 10 key factors to watch

By Admin

23 Jun, 2025

Dalal Street posted a strong rebound last week, with benchmark indices regaining lost ground despite intensifying geopolitical risks. The BSE Sensex surged 1,290 points to close at 82,408, while the Nifty 50 climbed 394 points to end the week at 25,112   up 1.59 percent. However, market optimism may soon be tested as fresh headwinds emerge.

Experts anticipate renewed volatility in the coming week following the United States' surprise entry into the Iran-Israel conflict, targeting Iranian nuclear facilities. This geopolitical development could overshadow earlier gains driven by dovish commentary from the Reserve Bank of India and delayed U.S. military intervention, which had temporarily calmed investor sentiment.

Here are 10 key factors that will shape market direction this week:

1. US Enters Iran-Israel Conflict

The U.S. airstrikes on Iran's Fordo, Natanz, and Esfahan nuclear facilities have significantly escalated tensions in the Middle East. Though U.S. officials claim the strikes aim to dismantle Iran’s nuclear program rather than provoke a wider conflict, fears of retaliation loom large. Iran may retaliate by targeting oil routes like the Strait of Hormuz, a key passage for 20% of global oil trade. As a result, Brent crude prices rallied 3.75% to $77.01 per barrel last week.

2. Fed Chair Powell’s Testimony

Scheduled for June 24–25, Federal Reserve Chair Jerome Powell’s testimony to Congress will provide critical insights into the U.S. central bank’s outlook on inflation, growth, and future rate cuts. Despite the Fed maintaining a cautious tone in June, with a 2025 GDP growth forecast of 1.4%, market participants remain split on the potential for rate cuts this year.

3. US GDP and Economic Data

Final GDP data for Q1 2025, along with PCE prices and consumer spending figures, will be released on June 26. Earlier estimates suggest the U.S. economy contracted slightly in Q1, and any further downward revision could pressure market sentiment. Other key U.S. releases include home sales, durable goods orders, and jobless claims.

4. China’s Top Legislature Meeting

From June 24 to 27, China's National People’s Congress Standing Committee will review crucial draft laws on competition, maritime security, public health emergencies, and more. Any signal of economic support or regulatory tightening from Beijing could influence global risk appetite.

5. Domestic Macro Data

India’s HSBC Manufacturing and Services PMI flash readings for June will be closely watched on June 23. Manufacturing activity moderated to 57.5 in May, and a further decline may raise concerns over economic momentum. Forex reserves data for the week ending June 20 will also be published on June 27.

6. IPO Buzz: HDB Financial in Focus

This week brings a flurry of IPO activity worth Rs 15,800 crore. The spotlight is on HDB Financial Services’ Rs 12,500-crore IPO, opening June 25. Kalpataru, Ellenbarrie Industrial Gases, Globe Civil Projects, and others will also launch public issues. The SME segment will be equally busy, with 13 companies either launching or closing IPOs, and 8 listings expected.

7. FII-DII Activity

Foreign Institutional Investors (FIIs) turned net buyers last week, pumping in Rs 8,709.6 crore. However, Domestic Institutional Investors (DIIs) were even more aggressive, with net purchases of Rs 12,636 crore. Their buying spree signals robust domestic confidence despite external turbulence.

8. Currency and Bond Market Movement

The Indian rupee weakened for the fourth straight week, closing at 86.56 per USD, while the U.S. Dollar Index rebounded 0.65% to 98.774. Bond yields cooled, with the 10-year U.S. Treasury yield dropping to 4.377%. A continued slide in yields could provide relief to equity markets.

9. Technical Outlook

The Nifty 50 remains rangebound between 24,450 and 25,200. A decisive close above 25,200 could pave the way to 25,500, while support exists at 24,900, 24,700, and 24,450. RSI stands at 60.81 and MACD shows fading momentum. Unless 25,500 is breached, a sideways trend may persist.

10. F&O Expiry and Volatility

June F&O expiry on June 26 could induce short-term volatility. Options data signals strong support around the 24,800–24,700 zone, with resistance seen at 25,400–25,500. The India VIX fell 9.33% to 13.67, staying below all major moving averages. A spike above 15 could change market dynamics quickly.

Outlook Ahead:
While strong DII inflows and improving domestic indicators provide a buffer, the escalating Middle East conflict and key global macro events may dictate Dalal Street’s near-term course. Investors should brace for higher volatility and track key global cues before making any aggressive bets.