Markets began the week with cautious optimism amid growing indications of a possible ceasefire in the West Asia conflict. Iran’s military response appeared weaker than expected, and pressure from Russia and China for an unconditional truce added to hopes that the situation may de-escalate.
Although Asian markets opened lower on Monday, sentiment quickly stabilised, buoyed by the sense that worst-case scenarios may not materialise. Notably, Iran’s key allies, Russia and China, refrained from offering significant support beyond calling for a UN Security Council meeting. Both nations, along with Pakistan, pushed for an immediate, unconditional ceasefire through a formal resolution.
The geopolitical narrative took a turn after the US entered the Israel-Iran conflict with heavy airstrikes. Contrary to fears of major escalation, the global response suggested limited retaliatory risk, leading to subdued declines in markets and a pullback in oil and gold prices.
Despite Iran’s parliament passing a resolution to close the Strait of Hormuz and block oil tankers, no concrete steps have been taken as of Monday morning. Analysts now believe Iran lacks both the external support and internal capacity to significantly widen the conflict.
Gift Nifty closed Friday night at 25,129 and dipped to 24,940 in early trade Monday, before recovering to 24,995 — suggesting a softer open for Indian markets.
While European markets closed higher on Friday, they still ended the week with losses, with most indices falling more than 1 percent. In the US, markets moved in mixed directions. The S&P 500 fell for the third straight session, ending the week down 0.15 percent. The Nasdaq also declined, while the Dow Jones alone posted gains.
Dow Jones rose 35.16 points (0.08 percent) to close at 42,206.82. S&P 500 fell 13.03 points (0.22 percent) to 5,967.84. Nasdaq dropped 98.86 points (0.51 percent) to 19,447.41. US futures were trading lower Monday morning: Dow down 0.43 percent, S&P 500 down 0.44 percent, and Nasdaq down 0.57 percent.
Asian markets also remained under pressure. Japan’s Nikkei was down 0.58 percent, South Korea’s Kospi slipped nearly 1 percent, and Hong Kong markets opened weak.
On Friday, Indian equity benchmarks surged as investors cheered the prospect of de-escalation in West Asia. The markets remained firm through the day, closing near their highs.
Nifty jumped 319.15 points (1.29 percent) to close at 25,112.40. Sensex gained 1,046.30 points (1.29 percent) to end at 82,408.17. Bank Nifty rose 675.40 points (1.22 percent) to 56,252.85. Nifty Midcap 100 surged 835.55 points (1.46 percent) to 57,995.50. Nifty Smallcap 100 climbed 181.10 points (1.01 percent) to 18,194.20
Market breadth was positive. On the BSE, 2,411 stocks advanced while 1,545 declined. On the NSE, 1,909 stocks rose and 961 fell. Twenty-eight NSE stocks hit 52-week highs, while 38 touched their lows. Sixty-seven stocks were locked in upper circuits, and 70 hit lower circuits.
Foreign Institutional Investors (FIIs) were net buyers on Friday, purchasing ₹7,704 crore in the cash market. Domestic Institutional Investors (DIIs), however, sold shares worth ₹3,657.70 crore. While FIIs invested ₹1,209 crore in Indian equities last week, net selling for June so far stands at ₹4,192 crore.
Analysts expect this week’s market direction to remain driven by geopolitical headlines. Nifty has support at 24,700, with deeper corrections likely if that breaks. On Monday, support levels are pegged at 24,875 and 24,655, while resistance is expected at 25,150 and 25,230.
Gold prices declined amid easing geopolitical concerns and lack of aggressive Iranian retaliation. After closing last week near $3,370 per ounce, gold fell to $3,350 in early Monday trade before staging a modest rebound.
In Kerala, gold prices had risen ₹200 per sovereign on Saturday to ₹73,880 but are expected to fall today. Silver dropped to $36.12 per ounce.
Rubber declined 1.53 percent to 161.30 cents/kg in international markets. Cocoa slumped 10.19 percent to $8,637.47/tonne. Coffee edged up 0.4 percent, tea surged 4.47 percent, and palm oil rose 0.32 percent.
The US dollar strengthened in response to the Iran conflict. The dollar index, which closed at 98.71 on Friday, climbed to 99.11 by Monday morning.
However, in forex trading, the dollar weakened slightly. The euro traded at $1.148, while the pound was at $1.342. The Japanese yen depreciated to 146.70 per dollar. Yields on 10-year US Treasuries rose to 4.405 percent amid declining bond prices.
On Friday, the Indian rupee appreciated, with the dollar closing 13 paise lower at ₹86.59. China’s yuan remained stable at 7.19 per dollar.
Despite initial fears over US involvement in the West Asia conflict, crude oil prices showed restraint. The threat of Iran blocking the Strait of Hormuz was seen more as a political message than an imminent reality.
Oil prices rose nearly 3 percent early Monday before paring gains. Brent crude was up 2.7 percent at $79.08. WTI crude traded at $75.85. Murban crude held at $79.56. Natural gas climbed 1.8 percent
Cryptocurrencies saw a decline over the weekend. Bitcoin fell below $99,000 but rebounded to $101,000 by Monday morning. Ethereum traded above $2,230. Most other altcoins remained under pressure.