The Iran-deal relief rally handed Indian equities a broad 1% lift on Monday, with Dow Jones posting a 500-point record and Nasdaq logging its best session in three months. The move was genuine breadth, not a narrow bounce — 15 of 17 Nifty sectors closed green, with cyclicals like Realty, Consumer Durables, and Auto absorbing the bulk of the re-rating. VIX shedding 3.22% to 14.24 confirms the fear premium is deflating, not merely suppressed.

The counterforce arrives Wednesday Jun 17, when FOMC economic projections and the Fed dot-plot print at 23:30 IST — the prior longer-run rate projection sat at 3.1%. Until those dots are visible, FII caution persists: Monday's FII outflow of 1,082 Cr against DII absorption of 5,341 Cr shows domestic money defending while foreign capital waits for rate-path clarity. The US 30-year yield holding at 4.97% keeps the global cost-of-capital ceiling intact.

Within today's session, the sector rotation tells the cleaner story. Pharma and Healthcare are the lone laggards, suggesting the defensives are being unwound in favour of rate-sensitive and capex-linked plays — Realty, Infra, and Financials — which is consistent with a market pricing in rate relief ahead. That rotation persists only if Wednesday's dot-plot does not reprice the Fed's terminal rate upward.