US-Iran Developments and Global Market Shifts Drive Key Changes for Indian Stock Market

Indian Stock Market Indices Open on a Muted Note

The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to open on a muted note on Monday, following mixed cues from global markets. Investors remain cautious due to the uncertainties over the US-Iran peace talks. Asian markets traded mixed, while the US stock market ended at a record closing high last week, with the S&P 500 registering its ninth consecutive weekly gain, its longest winning streak since December 2023.

This week, investors will watch out for key stock market triggers, including the RBI monetary policy, developments in US-Iran peace talks, movement in crude oil prices, shipping activity through the Strait of Hormuz, trends in FII flow, and other key domestic and global macroeconomic data releases. On Friday, the Indian stock market ended sharply lower after a sudden dip in the fag end of the session. The Sensex crashed 1,092.06 points, or 1.44%, to close at 74,775.74, while the Nifty 50 settled 359.40 points, or 1.50%, lower at 23,547.75.

Global Market Cues

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Asian markets traded mixed on Monday amid uncertainty around the US-Iran peace deal. Japan's Nikkei 225 gained 0.78%, while the Topix fell 0.3%. South Korea's Kospi jumped 2.40%, while the Kosdaq declined 1.58%. Hong Kong's Hang Seng index futures indicated a lower opening. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2%.

US Market

The US stock market indices hit record closing highs on Friday and posted weekly and monthly gains, led by a rally in tech shares. The Dow Jones Industrial Average gained 363.37 points, or 0.72%, to 51,032.34, while the S&P 500 rose 16.44 points, or 0.22%, to 7,580.07. The Nasdaq Composite closed 55.15 points, or 0.21%, higher at 26,972.62.

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Key Stocks

Nvidia stock price fell 1.45%, Microsoft shares rallied 5.45%, Dell shares jumped 32.8%, Apple stock price eased 0.14%, Amazon shares declined 1.23%, and Alphabet share price dropped 2.5%. Peers Hewlett Packard Enterprise shares spiked 12.6%, Super Micro Computer share price rallied 11.6%, and Tesla stock price fell 1.43%.

US-Iran War

The US and Iran traded messages over the weekend seeking changes to a draft agreement that would extend a ceasefire and open the Strait of Hormuz, but it was unclear if the sides were making much progress, Bloomberg reported. Meanwhile, Israel expanded its ground assault in Lebanon in the battle with the Iranian-backed Hezbollah militant group.

India-US Trade Talks

India and the US are all set to begin trade talks in Delhi from June 1 to June 4, as both countries look to finalize the interim trade agreement and take forward negotiations. Last week, US Ambassador to India Sergio Gor said that the bilateral negotiations had reached their final stretch.

FPI Outflows

Foreign Portfolio Investors (FPI) net sold Indian stocks worth ₹32,963 crore in the month of May, NSDL data showed. The total FPI outflows in the five months of 2026 reached ₹2,24,932 crore.

Crude Oil Prices

Crude oil prices rallied after Israel ordered troops to move further into Lebanon in the battle with the Iranian-backed Hezbollah militant group, Reuters reported. US crude futures rose 2.71% to $89.73 a barrel, while Brent futures gained 2.37% to $93.28 a barrel.

Dollar

The US dollar held steady as markets awaited the results of US-Iran peace talks. The dollar index of the greenback against a basket of currencies including the yen and the euro was flat at 99.00, after last week's drop of 0.4%. The euro fell 0.08% to $1.165, while Sterling slipped 0.07% to $1.3449. The yen weakened 0.08% to 159.41 per dollar.

Gold Rate

Gold prices traded flat, having found little support as a safe haven or as a hedge against inflation. Spot gold price was little changed at $4,535 an ounce.