Indian stock market: The Indian stock market ended the volatile week on a positive note, breaking a two-week losing streak as investor sentiment improved amid a favourable global backdrop and RBI measures aimed at boosting foreign currency inflows. Both indices closed higher for the week, with the Nifty 50 rising 1.10% to 23,622.90, while the Sensex advanced 1.73% to finish at 75,527.95.

Investor sentiment strengthened amid optimism over a possible U.S.–Iran peace agreement, which fuelled expectations of reduced geopolitical risks and greater stability in energy markets. Further supporting market confidence, the RBI introduced forex swap facilities for eligible external commercial borrowings (ECBs) and new FCNR(B) deposits, enhancing liquidity conditions and encouraging foreign currency inflows.

Stock Market Outlook next week

According to Ponmudi R, CEO at Enrich Money, markets are likely to remain highly sensitive to developments surrounding the proposed US–Iran agreement in the week ahead.

He noted that reports indicate that substantial progress has been made and a broad consensus has emerged among key stakeholders; investors will be looking for a formal announcement and signing of the deal before fully pricing in a durable improvement in the geopolitical outlook.

“Crude oil prices will remain a critical variable for market sentiment. Continued stability or further moderation in energy prices could reinforce the recent improvement in risk appetite by easing concerns around inflation, import costs and India’s broader macroeconomic outlook. Conversely, any setback in diplomatic efforts or renewed tensions in the Middle East could quickly revive volatility and trigger a renewed increase in energy prices,” he added.

Top 5 triggers for the Indian stock market

1] US Fed meeting

The US Federal Reserve’s Federal Open Market Committee (FOMC) meeting is set to be held on June 16–17, with investors widely expecting policymakers to leave interest rates unchanged, as indicated by CME Group’s FedWatch tool.

The upcoming June meeting will also mark the first announcement under the new Fed Chair, Kevin Warsh.

At the same time, inflationary pressures remain elevated, with the Fed’s preferred inflation measure, the Personal Consumption Expenditures (PCE) Index, rising 3.8% in April, driven in part by higher crude oil prices amid tensions in West Asia.

“The US Federal Reserve’s policy decision will be the most significant event. Market participants will closely assess the Fed’s commentary on inflation, growth, and the future trajectory of interest rates,” said Ajit Mishra, SVP, Research, Religare Broking.

2] US-Iran war update

US President Donald Trump said a peace agreement with Iran aimed at ending the conflict in West Asia would be signed on Sunday, June 14, 2026, adding that the strategically important Strait of Hormuz would be reopened to all vessels immediately afterward.

However, Iranian Foreign Ministry spokesperson Esmaeil Baqaei said the signing date has not yet been finalized and clarified that it would “not be tomorrow.” He further noted that the possibility of an agreement being reached within the next few days remains open.

3] Crude oil prices

Oil prices dropped to their lowest level since the initial phase of the Iran conflict, driven by indications of increased crude shipments through the Strait of Hormuz and growing optimism over progress toward a temporary peace agreement.

Brent crude futures declined 3.4% to settle at $87.33 a barrel, their lowest closing level since March 5, and posted a weekly loss of 6.2%. Meanwhile, West Texas Intermediate (WTI) crude ended Friday down 3.2%.

“Developments related to the U.S.–Iran negotiations and their implications for crude oil prices and the Strait of Hormuz will continue to influence global risk sentiment,” Mishra said.

4] FII outflows

Foreign institutional investors (FIIs/FPIs) continued to be net sellers on June 12, divesting equities worth ₹1,082.18 crore. In contrast, domestic institutional investors (DIIs) remained net buyers, investing ₹5,341.29 crore in the market, according to provisional exchange data.

During the trading session, DIIs purchased shares worth ₹18,877.03 crore and sold shares valued at ₹13,535.74 crore. FIIs, on the other hand, bought equities worth ₹12,064.61 crore but offloaded shares amounting to ₹13,146.79 crore.

So far this year, FIIs have emerged as net sellers of nearly ₹3.35 lakh crore in equities, whereas DIIs have continued to provide support to the market as net buyers.

“FPIs are unlikely to continue selling big in India in the context of stable currency and improving economic prospects. FPI selling is likely to slow down significantly. But for FPIs to turn buyers in India, the ongoing AI trade has to end. That appears some time away,” said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

5] Rupee vs US Dollar

The rupee strengthened significantly on Friday, gaining 67 paise to settle at 95.18 against the US dollar, driven by a sharp decline in global crude oil prices after US President Donald Trump signaled that a deal with Iran could be reached soon.

According to forex traders, the domestic currency also drew support from strong performance in local equity markets and weakness in the US dollar. In the interbank foreign exchange market, the rupee opened at 95.40 and moved between 94.95 and 95.53 during the session before ending at 95.18, marking a 67-paise recovery from its previous close.

The rebound came a day after the rupee had dropped 60 paise to close at 95.85 against the greenback on Thursday.

“Going ahead, the weekend news flow will be crucial. If there are no adverse developments regarding geopolitical negotiations, the rupee could attempt to break the important 94.80 resistance zone, which remains a key technical level on a closing basis. For the near term, rupee is expected to trade between 94.80–95.50. A sustained move below 94.80 could trigger a stronger recovery towards the 94.00 level in the coming sessions,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.