The Indian stock market concluded a volatile week in the red, with benchmark indices Nifty 50 and Sensex experiencing declines of 1.14 percent and 1.30 percent respectively, for the week ended June 13. Broader markets, including the BSE Midcap and Smallcap indices, also fell but demonstrated relative outperformance. This downturn was primarily driven by escalating tensions between Israel and Iran, persistent uncertainty surrounding US tariff policy, and significant foreign capital outflows. The week’s early optimism from US-China trade negotiations was quickly overshadowed by geopolitical developments, prompting a global risk-off sentiment and a surge in safe-haven assets like gold and US bonds.

Looking ahead, the Indian equity market is poised for continued volatility, influenced by several critical global and domestic factors. The ongoing Israel-Iran conflict remains a dominant concern, with recent reports indicating US military involvement in shooting down Iranian missiles and the UK moving military assets to the Middle East. This escalating geopolitical risk has sent ripples across global markets, including cryptocurrencies. President Trump’s recent statement, shared on June 15, 2025, clarifying US non-involvement in an attack on Iran while warning of retaliation and calling for a potential deal, further introduced uncertainty. This caused immediate drops in S&P 500 and Nasdaq 100 futures, and a surge in gold prices. Bitcoin saw a sharp 3.8% decline, falling to $65,900, while Ethereum dropped 4.2% to $2,347, highlighting how geopolitical news directly influences crypto prices, often mirroring or amplifying stock market movements due to shared investor sentiment.

A key focus for investors in the coming week will be the US Federal Open Market Committee (FOMC) meeting, scheduled from June 17-18. While the Federal Reserve is widely expected to maintain unchanged interest rates, market participants will meticulously scrutinize the Fed’s commentary and economic projections for future policy cues, especially given the benign inflation data (May CPI at 0.1% month-on-month) and uncertainty regarding the impact of US tariff policy. Economists anticipate the market to continue pricing in two Fed cuts in 2025, with the next potential cut expected in October.

Crude oil prices are another critical determinant of market trends. Brent Crude surged by 7 percent on Friday, settling at $74.23 a barrel, and rallied 12.5 percent for the week. This sharp increase, driven significantly by the Israel-Iran conflict and concerns over potential supply disruptions from the Middle East, particularly from the Strait of Hormuz—a crucial chokepoint for 20% of the world's crude—poses significant risks for India. As one of the largest crude oil importers, prolonged elevated prices could lead to a higher trade deficit, rupee weakening, reignited inflationary pressures, and eroded corporate profitability for sectors like oil marketing companies (OMCs), paint, cement, and transportation due to increased input costs and margin pressure.

Foreign portfolio investors (FPIs) have emerged as net sellers in Indian equities during June, offloading stocks worth ₹4,812 crore in the cash segment. This continuous selling, attributed to geopolitical tensions, stretched domestic market valuations, and rupee weakness, is likely to exert downward pressure on the Indian stock market. Additionally, several key macroeconomic data releases are on the radar, including India’s May Wholesale Price Index (WPI) inflation and trade balance data on June 16, the eurozone’s May Consumer Price Index (CPI) data, and US initial jobless claims on June 18.

Beyond these primary factors, other developments such as the progress of the monsoon, the G-7 summit (June 15-17), the Bank of Japan’s policy decision on June 17, and news regarding US trade deals will also influence market sentiment. For the Indian markets, technical analysis points to Nifty remaining range-bound between 24,450–25,200, with crucial support at 24,400–24,450. A decisive breakout above 25,000 is needed for bullish momentum, while breaching 24,462 could intensify sell-offs. The Nifty Bank index has corrected significantly, with the psychological 55,000 mark acting as critical support and 56,000 as resistance.

In the crypto space, the geopolitical events created a volatile environment. Following President Trump’s statement, Bitcoin’s 30-day correlation with the S&P 500 remained high at 0.68, demonstrating its interconnectedness with traditional markets during risk-off events. Trading volumes for BTC/USD on major exchanges spiked by 35%, and increased whale activity suggested potential accumulation. Bitcoin’s and Ethereum’s Relative Strength Index (RSI) dropped to oversold conditions (38 and 35 respectively), hinting at potential for reversal. However, crypto-related stocks like Coinbase Global (COIN) also saw declines, and Bitcoin ETF inflows slowed, reflecting cautious sentiment. Investors are advised to remain cautious, monitor global and domestic developments closely, and keep an eye on key support and resistance levels across both equity and crypto markets, as the interplay between stock market sentiment and crypto volatility is likely to dictate near-term price action.