Key Factors to Watch This Week from June 16, 2025: Fed Meeting, Foreign Fund Inflows, Crude Oil & More

As markets opened for the first trading session of the week on June 16, 2025, the BSE Sensex rose 257.76 points to 81,376.36, while the Nifty 50 advanced 86.85 points to 24,805.45. This positive start came on the heels of a sharp global selloff last Friday, driven by escalating geopolitical tensions following Israel’s strikes on Iran.

On that day, the Sensex had slumped 573 points to close at 81,118, while the Nifty slipped 169 points to settle at 24,718.

As the new week gets underway, here are 5 key factors that could shape market sentiment:

US Federal Reserve Policy Verdict

All eyes are on the US Federal Reserve’s upcoming policy announcement. While rate cuts are widely anticipated later this year, investors are keenly watching for signals on the timeline and scale of these cuts.

Mixed economic data from the US has added to the uncertainty, making the Fed’s tone and guidance crucial for market direction globally.

Rising Israel-Iran Geopolitical Tensions

Renewed tension in the Middle East—particularly between Israel and Iran—continues to rattle global markets. Israel’s reported pre-emptive military actions and Iran’s retaliatory threats, including targeting US military bases, have heightened fears of broader conflict. Any escalation could trigger risk-off sentiment.

Institutional Flow Trends

Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹1,233.47 crore on Friday. In contrast, Domestic Institutional Investors (DIIs) supported the markets, with net purchases of ₹2,906.13 crore. The tug-of-war between FIIs and DIIs will be closely watched as it often sets the near-term tone for the market, as per news reports.

Crude Oil Price Surge

Crude oil futures spiked dramatically, rising over 10% to hit $76 per barrel—the sharpest single-day gain in five years.

According to media reports, the rally, driven by escalating Middle East conflict fears, has raised concerns about supply disruptions, particularly through the Strait of Hormuz, a critical global oil transit route. Higher oil prices could weigh on India's import bill and inflation outlook.

Indian Rupee Under Pressure

The Indian Rupee weakened sharply, breaching the 86.05 level against the US dollar, even as the dollar index softened globally. Risk aversion driven by geopolitical turmoil and surging crude prices added pressure on the currency. Currency movement will remain a key focus area for investors given its implications for imported inflation and corporate earnings.

Read More: Indian Stocks to Watch Amid Iran-Israel Conflict: Adani Ports, SBI and More.

Conclusion

Market sentiment this week is expected to remain sensitive to global cues, especially the outcome of the US Federal Reserve meeting and developments in the Middle East. Alongside, trends in institutional flows, crude oil prices, and rupee movement will also be closely tracked by investors. As these factors continue to evolve, they may contribute to both opportunities and volatility across sectors and asset classes.

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