Geopolitical Tensions and Economic Signals Took Center Stage

In the week gone by, global stock markets saw heightened volatility, primarily driven by escalating geopolitical tensions and mixed economic indicators. In this blog, we’ll know in detail what happened last week (June 9, 2025 to June 13, 2025) all across the globe.

Crude Oil Price Surged

The sharpest tremor came after Israel launched a direct strike on Iran’s capital, Tehran, causing immediate global concern. This move has reignited fears of geopolitical tension in the Middle East and raised alarms over the stability of energy supply routes. As a result, crude oil prices surged sharply.

In parallel, the United States further added to market uncertainty. US President Donald Trump announced plans to dispatch formal letters to several trading partners within the coming weeks, signaling unilateral tariff hikes ahead of a critical July 9 deadline. This development has introduced fresh concerns over the potential for a renewed global trade war, reminiscent of earlier tariff conflicts.

UK Trade Framework with America

Economic indicators provided a mixed picture across regions. In the Eurozone, GDP expanded by 1.5% year-on-year in Q1 2025, with the broader EU growing at 1.6%, outperforming both the previous quarter and the same period last year.

On the other hand, the UK economy recorded a noticeable slowdown in April, partially attributed to the expiration of a key tax relief measure on property transactions. The UK also experienced its steepest drop in exports to the US, directly impacted by the newly imposed US tariffs.

Of all major economies, only the UK has managed to negotiate a working trade framework with the US, alongside a provisional tariff ceasefire with China.

Asian Economies Macro Figures

In Asia, Japan’s Q1 2025 GDP contraction was revised from -0.7% to a slightly better -0.2% year-on-year. However, China’s macroeconomic environment remains fragile. The GDP deflator is projected to fall to -0.2% for 2025, signaling persistent deflationary pressure.

China’s Producer Price Index (PPI) declined by 3.3% year-on-year in May and 0.4% month-on-month, reflecting weak domestic demand despite multiple easing measures by the People’s Bank of China, including reserve requirement cuts. Markets remain skeptical of Beijing’s ability to stimulate consumption meaningfully.

Indian Market Remained Volatile on Global Cues

Domestically, Indian markets opened the week on a positive note but lost momentum mid-week, closing on a weak footing. The after-effects of the RBI’s recent repo rate cut were overshadowed by global economic volatility.

On a positive note, India’s Consumer Price Index (CPI) for May 2025 eased to 2.82%, the lowest year-on-year inflation print since February 2019; however, rising crude prices may cause inflationary pressure.

Trade talks between India and the US are progressing, with hopes of a phased agreement by July to address the impact of Trump’s reciprocal tariffs, which currently target Indian exports with 26% duties. In terms of capital flows,

Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹3,548.87 crores in June so far, contributing to a cumulative outflow of over ₹1.33 lakh crores in 2025. Domestic Institutional Investors (DIIs), however, remained supportive, purchasing a net ₹41,109.28 crores in June so far, with their total net investment crossing ₹3.26 lakh crores year-to-date.

Future Outlook

Looking ahead, market sentiment will likely remain risk-averse in the near term. Sectors heavily reliant on oil derivatives-such as aviation, paints, tyres, and adhesives-may face pressures, while oil producers like ONGC and Oil India could benefit from elevated crude prices.

The market’s direction will depend largely on how geopolitical tensions evolve and the trajectory of global economic data. So, open Demat account with SMC Global Securities and invest as per your investment objective and risk profile.

Reference:
SMC Global Securities’ Research Team

Author: All Content is verified by SMC Global Securities.