From RBI MPC, crude oil rates to Iran war: Key factors that will likely drive D-street action this week – Markets

– Nifty falls for the 3rd straight session, declines ~1.5%

– Top Loser – Power Grid and INDIGO

– Except Nifty IT, all sectoral indices closed in red

– Nifty Realty fall over 0.2% mainly dragged by Godrej Properties and Brigade Enterprises

– Nifty PSU Bank falls over 0.8%, Canara Bank and Bank of India lead losses

– Nifty Energy snaps 3 session gaining streak, falls ~1.6%; Mainly dragged by JP Power and Power Grid

– Nifty Auto and Metal fall 2%

Key factors that will decide market mood starting Monday

The Reserve Bank of India’s (RBI) rate-setting panel will begin its three-day meeting on June 3, with Governor Sanjay Malhotra scheduled to announce the outcome on June 5 at 10:00 AM, amid growing concerns over inflation.

The Reserve Bank of India will keep its key interest rate unchanged at 5.25 per cent in June, according to most economists in a Reuters poll, although a majority now expect at least one increase by year-end due to risks from high oil prices and pressure on the rupee from weak capital inflows.

But, with crude oil prices hovering about 30 per cent over levels seen before the US-Israeli war with Iran, the rupee down roughly 6 per cent for the year and wholesale inflation accelerating sharply in April, a growing number of economists now expect policy action may eventually be needed to limit the pass-through to inflation.

Nearly 80 per cent of economists, 44 of 56, in the May 22-29 Reuters poll expected the Monetary Policy Committee to keep ⁠the repo rate unchanged at 5.25 per cent on June 5.

Iranian state media reported on Saturday that a proposed memorandum of understanding with the United States included an agreement to release USD 12 billion in frozen assets.

The report cited an “unofficial” draft of the memorandum, and a similar item carried by state TV earlier this week was dismissed by the White House as a “fabrication”.

It comes a day after US President Donald Trump issued his own detailed characterisation of a potential agreement aimed at halting the war between the two foes, key elements of which were likewise disputed by Iranian sources.

Saturday’s state TV report said, “the United States has pledged to provide Iran with full access to USD 12 billion of its assets within 60 days, so that these resources can be transferred and spent in banks of Iran’s desired destination without restrictions.”

Rupee jumped sharply on Friday to log its best single-day gain in nearly two months as likely intervention by the central bank converged with a drop in oil prices, ‌which also briefly lifted the local currency above the 95/USD mark.

The rupee ended the session at 95 per dollar, up 0.7 per cent from the previous session, its best day since April 2. It gained by a similar amount week-on-week, but was flat for the month.

While the rupee appeared set to endure a weaker day, likely ⁠dollar selling intervention reversed the trajectory, with a drop in crude prices adding to the upward momentum.

Foreign Portfolio Investors (FPIs) continued their selling streak in Indian equities in May, with net outflows amounting to Rs 32,963 crore during the month, according to data shared by the National Securities Depository Limited (NSDL).

May marked the third consecutive month in 2026 in which foreign investors remained net sellers in the Indian equity market.

Global crude oil prices fell to six‑week lows over last weekend after reports came that the United States and Iran had tentatively agreed to extend a ceasefire and that the Strait of Hormuz could soon reopen.

US West Texas Intermediate (July delivery) settled down 1.73 per cent at USD 87.36 a barrel, while international oil benchmark Brent crude (August contract) fell 1.7 per cent to close at USD 91.12 last week.

(With inputs from Reuters, ANI, IANS)