Dalal Street Week Ahead: Key Developments to Watch in RBI MPC Meet and US–Iran Talks

Market Sentiment Expected to be Influenced by Multiple Events in Upcoming Week

The Indian equity market is expected to witness significant developments in the upcoming week, with several key events likely to influence market sentiment. The week ahead will see a series of high-profile events, including the US-Iran talks, the proposed India-US interim trade pact, and the Reserve Bank of India's (RBI) monetary policy decision.

US-Iran Talks and India-US Interim Trade Pact Negotiations

Investors will closely monitor developments around talks between the United States and Iran, after US President Donald Trump indicated that the two countries were nearing an agreement. The proposed India-US interim trade pact is also expected to be a major focus, with chief negotiators from India and the US set to begin a four-day round of talks on Monday to finalize details of the agreement.

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The RBI's monetary policy decision is also expected to have a significant impact on market sentiment, with the central bank's Monetary Policy Committee (MPC) set to meet from June 3 to June 5. According to a Moneycontrol poll of 14 market participants, 10 expect the central bank to keep interest rates unchanged, while four anticipate a rate hike beginning with the June policy review.

Primary Market Activity and Foreign Investor Activity

The primary market is set to witness fresh activity, with CMR Green Technologies and Hexagon Nutrition planning to launch their initial public offerings (IPOs), together valued at nearly Rs 770 crore. Foreign Portfolio Investors (FPIs) remained net sellers in Indian equities in May, pulling out Rs 32,963 crore, with the total outflow from equities by FPIs in 2026 reaching Rs 2.25 lakh crore.

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Rupee Movement and Crude Oil Prices

The rupee's movement against the US dollar will remain an important factor for equity markets, particularly in the context of foreign fund flows. The rupee has weakened nearly 6 percent so far in 2026 and around 10 percent over the past year, falling from the mid-80s to about 95.5 against the US dollar despite RBI's efforts to defend the currency. Crude oil prices declined to a six-week low over the weekend amid hopes of a US-Iran agreement and the reopening of the Strait of Hormuz.

Key Macroeconomic Data and Technical Outlook

Several macroeconomic indicators scheduled for release during the week will be tracked by investors, including Industrial Production (IIP) data for April 2026, the final HSBC Manufacturing PMI reading for May, and Services PMI and Composite PMI data. From a technical perspective, analysts said the Nifty remains in a consolidation phase, with the 23,800–24,000 zone expected to act as a hurdle for the index. A decisive breakout above this band may trigger fresh momentum toward the 24,400–24,600 zone.