As we step into the first week of June, Indian equities are expected to navigate a tug-of-war between lingering global uncertainties and resilient domestic fundamentals. Investor caution persists amid global trade tensions, especially after a U.S. federal appeals court temporarily reinstated tariffs from the Trump era. This development has kept global sentiment on edge, with markets struggling to find direction. The broader risk environment may continue to feel the weight of macroeconomic concerns, especially as volatility in the U.S. 10-year bond yield adds to the uncertainty.
In this scenario, traders are likely to adopt a wait-and-watch stance, especially with key global data releases on the horizon and the RBI’s monetary policy decision due next Friday. These events will be closely watched, as they could influence foreign investor flows and overall market sentiment.
However, domestic cues continue to lend crucial support. India’s economic momentum remains steady, underpinned by robust GDP growth, healthy corporate earnings, and expectations of an above-normal monsoon season. These factors help buffer the local market against global volatility.
Foreign portfolio investors (FPIs) have also shown renewed confidence. As per NSDL data, FPIs poured in Rs 19,842.55 crore into the secondary market in May 2025, marking a sharp uptick from the Rs 3,243.03 crore recorded in April.
Domestic Cues:
The Reserve Bank of India (RBI) interest rate decision is on Friday, 6 June 2025 at 10:00 AM. RBI slashed its key repo rate by 25bps to 6% at its April meeting. The latest rate adjustment brought borrowing costs to their lowest level since November 2022.
India’s HSBC Manufacturing PMI Final for May is scheduled for release on Monday, 2 June 2025. The HSBC India Manufacturing PMI rose slightly to 58.3 in May 2025 from 58.2 in April.
India’s HSBC Composite PMI Final for May is due on Wednesday, 4 June 2025. The HSBC India Composite PMI rose to 61.2 in May 2025 from 59.7 in April, marking the highest print since April 2024, flash data showed.
India’s HSBC Services PMI Final for May will also be released on Wednesday, 4 June 2025. The HSBC India Services PMI increased to 61.2 in May 2025, up from 58.7 in the previous month, according to preliminary data.
Global Cues:
The ISM Manufacturing PMI for May in the United States is scheduled for release on Monday, 2 June 2025. The ISM Manufacturing PMI for the U.S. slipped to 48.7 in April 2025 from 49.0 in March.
China's Caixin Manufacturing PMI for May will be released on Tuesday, 3 June 2025. The Caixin China General Manufacturing PMI declined to 50.4 in April 2025, down from March’s four-month high of 51.2.
The Euro Area's Inflation Rate Year-over-Year Flash estimate for May is also set for release on Tuesday, 3 June 2025. The annual inflation rate in the Euro Area was confirmed at 2.2% in April 2025, hovering just above the European Central Bank’s 2.0% target midpoint.
The United States will publish JOLTs Job Openings data for April on Tuesday, 3 June 2025. Job openings in the United States fell by 288,000 to 7.192 million in March 2025, the lowest in six months.
The ISM Services PMI for May in the United States will be published on Wednesday, 4 June 2025. The ISM Services PMI unexpectedly jumped to 51.6 in April 2025 from a nine-month low of 50.8 in March.
On Thursday, 5 June 2025, the European Central Bank will announce its Interest Rate Decision. This will be followed by a press conference that provides further insight into the ECB’s monetary policy stance. The European Central Bank’s fight against inflation is approaching its final stages, but trade tensions could pressure prices in the short term, while a prolonged trade war may drive inflation higher in the longer term, according to the minutes from its April 16–17 meeting.
The United States will release its Non-Farm Payrolls data for May on Friday, 6 June 2025. The U.S. economy added 177,000 jobs in April 2025, a slowdown from the downwardly revised 185,000 in March.