Key Market Triggers to Watch This Week: RBI, US-Iran Tensions, and More

Indian Stock Market Tumbles Amid Ongoing Uncertainty

The Indian benchmark equity indices, the Sensex and Nifty 50, closed significantly lower on Friday, May 29, after a sharp late-session decline. For most of the trading day, both indices moved within a tight range as investors remained cautious amid ongoing uncertainty over a possible US-Iran agreement. However, selling pressure intensified in the final hour of trade, triggering a steep market fall.

The Sensex tumbled nearly 1,300 points, while the Nifty 50 dropped to an intraday low of 23,485. At the close, the 30-stock Sensex was down 1,092 points, or 1.44%, at 74,775.74. The Nifty 50 also ended weak, falling 359 points, or 1.50%, to settle at 23,547.75.

Market Outlook Next Week

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According to Ponmudi R, CEO of Enrich Money, markets are expected to remain highly sensitive to geopolitical and macroeconomic developments in the coming week. Investor attention will be firmly focused on the evolving US-Iran negotiations, broader diplomatic developments in the Middle East, and the trajectory of crude oil prices.

While expectations of a potential agreement have helped improve risk sentiment and drive a sharp correction in energy prices, investors remain cautious as a definitive breakthrough has yet to materialize. In the current environment, investor positioning is likely to remain selective and cautious, with confidence contingent on tangible progress on the diplomatic front and continued stability across energy and currency markets.

Top 5 Triggers for the Indian Stock Market

1. RBI MPC Meeting

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The Reserve Bank of India's Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, is set to convene from June 3 to June 5, 2026. After two days of detailed policy discussions, Governor Malhotra will unveil the MPC's final decision on Friday, June 5, 2026, around 10:00 AM IST. This will be followed by a press conference at 12:00 PM IST, where he is expected to discuss the economic outlook, key macroeconomic trends, and liquidity measures.

2. US-Iran War

According to an AFP report, Iranian state media said that a proposed memorandum of understanding with the United States envisages the release of $12 billion in Iranian assets that are currently frozen. The report referred to an "unofficial" draft of the memorandum. A similar report aired by state television earlier this week was rejected by the White House, which described it as a "fabrication."

3. Crude Oil Prices

Oil futures dropped more than 2% to six-week lows on Friday, marking their sharpest weekly decline since early April, as investors awaited confirmation of a ceasefire agreement involving the US, Israel, and Iran. Brent crude futures for July, which expired on Friday, settled at $92.05 per barrel, down $1.66 or 1.8%, while US WTI crude futures closed at $87.36 per barrel, falling $1.54 or 1.7%.

4. FII Outflows

Foreign portfolio investors (FPIs) turned aggressive sellers in Indian equities on Friday, offloading shares worth a net ₹20,637 crore in a single trading session. The move marked one of the largest single-day selloffs in recent years as markets reacted to the latest rebalancing of the MSCI indices.

5. Rupee vs US Dollar

The Indian rupee strengthened by 73 paise to settle at 94.85 against the US dollar on Friday, supported by improved market sentiment following renewed optimism surrounding a peace agreement between the US and Iran. According to forex traders, the USD/INR pair gained as crude oil prices declined overnight and the US dollar weakened after the US and Iran reportedly agreed to extend their ceasefire arrangement by another 60 days.