The headline equity indices erased early gains to end marginally lower in a volatile session on Thursday, with the Nifty 50 falling 34.55 points or 0.14% to 24,196.75 and the Sensex declining 122.56 points or 0.16% to 77,988.68. According to latest reports, markets opened higher on optimism around a potential US-Iran peace deal and held gains in the first half, but selling pressure in the latter half wiped out intraday advances, pulling the Nifty below the 24,200 mark. Private banks and auto stocks led the decline, while metal and IT shares provided some support. The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, slipped 3.12% to 18.09, indicating reduced fear levels despite the session's volatility.
Market experts are increasingly optimistic about India's potential to outperform global markets in the coming period. Kunal Bothra from ET Now noted that 'There has been a huge lag and underperformance through 2024 and 2025. That gap will eventually get filled. There is a real possibility of India entering an outperformance zone now'. According to Bothra, 'India could even outperform going forward. The recovery in the S&P 500 and Nasdaq to all-time highs has been phenomenal. These indices had fallen more than 10%, and the V-shaped recovery we've seen is quite spectacular'. He emphasized that 'Indian markets appear more closely aligned with US equities than Asian peers', with 'Even today, with Hang Seng down nearly 1% today, GIFT Nifty is relatively flat. That tells you we are showing resilience versus Asia and are mirroring US price action more closely'. Despite Thursday's consolidation, the underlying sentiment remains positive as 'India could even outperform going forward'.
Despite index-level consolidation, market breadth signals are showing remarkable strength. Bothra highlighted that 'The best part of the last 7-8 sessions has been market breadth. Without doubt, it has been spectacular'. He noted 'You don't see 5 times to 10 times volume expansion across so many stocks...unless risk appetite has genuinely returned'. This breadth improvement suggests that 'Large caps may be done with the first phase of the rally. Now, midcaps and smallcaps could start outperforming'. The BSE 150 MidCap Index jumped 0.52% and the BSE 250 SmallCap Index rose 0.99%, with 2,808 shares rising and 1,539 shares falling on the BSE, indicating strong underlying market participation. The NSE's India VIX at 18.09 reflects reduced volatility expectations, supporting the broader market's outperformance.
Modi provided a cautious view on the IT sector, citing structural rather than cyclical challenges. As reported by Mint, 'Our view on the IT sector is more cautious than consensus, largely because we believe the challenges it faces are not just cyclical, but increasingly structural in nature'. He noted that traditional IT services companies are experiencing a transition that could resemble a secular bear phase, with pressure coming from slower discretionary spending, longer deal cycles, and increasing pricing pressure. Modi warned that 'AI could prove to be as disruptive to traditional IT services as Amazon was to legacy retailers', potentially compressing the traditional IT services value chain through automation and AI-driven platforms. However, he emphasized that 'Not all companies will be impacted equally—those that are able to pivot, invest in AI capabilities, and move up the value chain could still create value over time'. Wipro rose 0.19% following its Q4FY26 results, with net income at ₹3,500 crore (12.3% QoQ increase) and IT services segment revenue at $2,651 million. The company's board approved a share buyback of up to 60 crore shares at ₹250 per share via tender offer, aggregating up to ₹15,000 crore.
Modi expects the ongoing Q4 earnings season to remain muted, with caution extending into Q1 as well. According to Mint reports, 'Expectations from the ongoing Q4 earnings season remain fairly muted, and that caution extends, to some degree, into Q1 as well'. He attributed this to global uncertainties, geopolitical tensions, and lingering demand-side softness, noting that 'a broad-based earnings revival is unlikely to be visible immediately'. Modi believes 'the more meaningful assessment of earnings momentum is likely to begin from the September quarter, when some of these transient headwinds could start to ease'. He noted that 'earnings delays driven by external shocks tend to be recovered, not lost, once the shock clears', suggesting that the anticipated Q2 FY27 catch-up could be more pronounced than current Street models indicate. GTPL Hathway tanked 4.90% after reporting a consolidated net loss of ₹15.01 crore in Q4 FY26, while Tejas Networks tumbled 4.03% following a net loss of ₹211 crore.
