Dalal Street on Edge: War, IPOs, FIIs — Top Triggers for the Week Ahead

 June 22, 2025 – Dalal Street is poised for a highly volatile and significant trading week ahead, starting Monday, June 23. The escalating Israel-Iran conflict, with the direct entry of the United States, will be the primary and most impactful global trigger. Alongside this geopolitical uncertainty, a flurry of Initial Public Offerings (IPOs), the evolving trend of Foreign Institutional Investors (FIIs), and key domestic factors will dictate market sentiment.

Despite geopolitical tensions, Indian benchmark indices, Sensex and Nifty 50, closed with strong gains on Friday, June 20, primarily due to short covering ahead of monthly derivatives expiry and a rebound in heavyweight sectors. However, the direct U.S. strikes on Iranian nuclear facilities, confirmed early this Sunday, fundamentally alter the risk landscape.

Here's a breakdown of the top triggers that will dictate Dalal Street this week:

1. Israel-Iran War & US Involvement: The Overarching Concern

• Heightened Geopolitical Risk: The direct U.S. military intervention, targeting Iranian nuclear facilities, marks an unprecedented escalation. This raises fears of a wider regional conflict and potential disruptions to global oil supplies, particularly through the Strait of Hormuz.
• Crude Oil Prices: While Brent crude saw a decline on Friday (to around $77/barrel) on initial hopes of de-escalation, the latest U.S. strikes are highly likely to send oil prices soaring again. India, being a major oil importer, is particularly vulnerable to a sustained spike in crude, which could fuel inflation and widen the current account deficit.
• Global Market Sentiment: The conflict will continue to drive global risk aversion. While Indian markets showed some resilience last week, a prolonged or intensified conflict could lead to significant selling pressure from foreign investors.
• Strait of Hormuz: Threats by Iranian hardliners to close the Strait of Hormuz, a critical chokepoint for a fifth of the world's oil, if realized, would cause an immense supply shock and economic disruption globally. India imports a significant portion of its oil and gas through this strait. India has already ramped up oil imports from Russia and the US in June, indicating a proactive diversification strategy amidst these tensions.
  
  

2. IPO Tsunami: A Busy Primary Market

• 12 New IPOs: The primary market is set for an exceptionally busy week with 12 new IPOs (Initial Public Offerings) collectively aiming to raise approximately ₹15,800 crore. This includes five mainboard IPOs and seven in the SME segment.
• HDB Financial Services IPO: The highlight will be HDFC Bank's NBFC subsidiary, HDB Financial Services, launching the year's largest IPO worth ₹12,500 crore. Its performance will be closely watched as a gauge of broader investor appetite.
• Other Key Mainboard Issues: Kalpataru Ltd (real estate), Ellenbarrie Industrial Gases, and Globe Civil Projects are among other mainboard IPOs opening.
• Listings: Eight new listings are also scheduled for the week, adding to the primary market buzz.

3. FII & DII Activity: Shifting Flows

• FII Volatility: Foreign Institutional Investors (FIIs) have been net sellers in Indian equities in June (around ₹4,192 crore so far), indicating caution. However, they did show buying momentum on Friday, June 20, with a net equity purchase of ₹7,940.70 crore. The direct US intervention in the Israel-Iran conflict could trigger renewed outflows.
• DII Support: Domestic Institutional Investors (DIIs) have been strong buyers, providing crucial support and preventing major market shocks amidst FII volatility. Their continued buying will be critical this week.
• Sectoral Preferences: FIIs have shown confidence in financials, chemicals, and oil & gas sectors, while pulling out of FMCG and telecom in early June. This trend could see further shifts based on global events.

4. Technical Levels & Market Outlook

• Nifty Consolidation: The Nifty 50 has been consolidating within the 24,500-25,200 range. A sustained move above 25,200 could signal a breakout towards 25,600-25,800. However, a break below 24,500 could lead to a short-term correction, especially given global uncertainties.
• Bank Nifty Strength: The Bank Nifty closed at 56,250, showing strength, with immediate resistance at 57,000 and strong support around 55,000.
• "Buy on Dips" Strategy: Market experts suggest that any dips due to geopolitical concerns should be capitalized upon to build quality portfolios for a medium to long-term perspective.

5. Other Key Triggers:

• India-US Trade Deal: Progress on the India-US trade agreement, with India hoping for a conclusion before July 9, could provide a positive domestic trigger.
• Corporate Actions: Several companies have record dates for dividends, stock splits, rights issues, and bonus shares this week, leading to stock-specific movements.
• Monsoon Progress: The progress of the monsoon remains a crucial factor for the Indian economy and agricultural-related stocks.
• Global Cues: Performance of US markets (Dow, S&P 500, Nasdaq), and other global economic data will continue to influence Dalal Street.
• Sensex Rejig: Tata Group's Trent and Bharat Electronics (BEL) will enter the benchmark 30-share Sensex, replacing Nestle India and IndusInd Bank, effective June 23, potentially leading to passive fund flows.

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Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investing in the stock market involves risks, and readers are advised to consult with a qualified financial advisor before making any investment decisions. The information provided is based on publicly available data and market analysis as of June 22, 2025, and may be subject to change.